What happens if Lam Research (LRCX) blows it out -- which I think it will -- and no one cares?
Did you notice the bifurcation in yesterday's tech market? The FANGs -- Action Alerts PLUS holding Facebook (FB) , Trifecta Stocks name Amazon (AMZN) , Netflix (NFLX) and Google parent Alphabet (GOOGL) -- weren't so hot, but even worse?
The traditional old names in tech, namely Seagate (STX) , which reported a miserable quarter, and Micron (MU) , which went down in sympathy (so did Western Digital (WDC) for a time, but then that recovered because it is a special situation owing to its unbending commitment to get Toshiba's flash biz.)
What was the read-through that had people spooked? Namely the Micron reversal. Micron has been hanging out at these $30 levels now for three months, and I know shorts are smelling blood. They figured that if drives are soft then so must be DRAMs, because they sell to the same customers.
DRAMs, though, have been a case of tight supply, and that brings us back to Lam. You need Lam equipment to make these chips and if Lam doesn't blow the numbers away and say it is still too hard to meet demand, then I think it can get hit.
You see, the whole supply and demand situation when it gets out of whack, meaning when it tips from shortage to equilibrium into oversupply as has been the case with disk drives, can be disastrous.
Now, in the last 24 hours we got great numbers from Advanced Micro Devices AMD -- a positive readthrough for Nvidia (NVDA) -- and a really solid performance from Texas Instruments (TXN) .
Those cut to the positive for Lam. But I can't emphasize how important this quarter will be for the complex.
I know that tonight's all about Facebook, after the dent in FANG from Alphabet.
But Lam is no sideshow. Make it front and center for your thinking.
