Josh Brown Explains Selling Lam Research Amidst Chip Sector Scrutiny

Lam Research Trade and Chip Sector Outlook

• 🎯 Josh Brown explains his decision to sell Lam Research, which was part of his "best stocks in the market" list.
• 📉 The sale was triggered by earnings, and despite an attempt to re-enter on weakness, the trade did not result in profit.
• 💡 Brown highlights that the main event for the chip sector is Broadcom's upcoming earnings report, which is expected to confirm demand trends similar to Nvidia's.

Broadcom's Significance in the AI Theme

• 📊 Broadcom, the seventh-largest company in the S&P 500, is expected to report significant year-over-year growth in revenue and earnings per share.
• 🚀 Its performance is crucial for ratifying the health of chip demand, especially within the overarching AI theme.
• 🤝 While not directly competing in the same chips, Broadcom's report is seen as a key indicator for the broader semiconductor industry.

Chip Equipment Stocks and Cyclicality

• ⚙️ Lam Research, Applied Materials, and KLA are identified as the three major players in chip equipment.
• ⚠️ Brown acknowledges that these are high beta names and still likes Lam Research fundamentally, but notes their inherent cyclical nature.
• 📈 Despite the excitement around the secular AI buildout, chip equipment stocks remain cyclical, leading to concerns about potentially peaking cycles for investors who have seen huge gains.