Shares of Lam Research Corp. are up 0.7% in premarket trading Tuesday after J.P. Morgan analyst Harlan Sur defended the stock amid concerns about Lam's shipment outlook. "On overweight-rated Lam Research, we don't disagree that there is some downside risk to estimates in C2H18, but given our recent research efforts, we believe the services business (recurring revenue) that is 25% of their overall business and deferred revenue backlog of $1.1 billion translate to minimal downside in 2H revenues and earnings and continued growth in CY19," Sur wrote. He recommended buying shares of Lam and Applied Materials Inc. following recent declines in their stock prices. "Demand fundamentals remain strong and for the most part as NAND players are executing well on their cost curves," Sur wrote. "However, we believe one large memory maker could be shifting its focus to higher layer count NAND in order to improve its cost structure." Lam shares are up 19% over the past 12 months, while the S&P 500 has gained 15% and the PHLX Semiconductor Index has risen 30%.