ARM Holdings ($ARM) vs Lam Research ($LRCX): Contrasting Plays Across the AI Semiconductor Chain Different parts of the AI value chain: ARM licenses chip architecture and is expanding into data-center CPUs, while LRCX manufactures the wafer-fabrication equipment used to build semiconductors. Both are riding strong AI tailwinds: ARM's data-center royalties are surging, while LRCX is benefiting from AI-driven memory and advanced-packaging equipment demand. Business models diverge sharply: ARM runs an asset-light, high-margin licensing model, whereas LRCX is a capital-intensive equipment supplier with a cyclical demand profile. Valuations are elevated for both: Both stocks have rallied significantly and now trade well above their historical earnings multiples.