12 Stocks to Buy That May Be Splitting Soon

9. KLA Corp. (NASDAQ:KLAC)

Share Price as of March 17: $713.00

Surge in Share Price in 5 Years: 525.33%

Stock Split Confirmed: No

Number of Hedge Fund Holders: 58

KLA Corp. (NASDAQ:KLAC) designs, manufactures, and markets process control and yield management solutions for the semiconductor and electronics industries. It operates across three segments that provide inspection, metrology, and process control tools, as well as wafer processing technologies. These segments serve the semiconductor, PCB, display, and packaging markets.

The company’s Process Control segment saw a 12% year-over-year revenue increase in 2024. This segment provides vital inspection tools for semiconductor manufacturing. It is driven by the demand for advanced technologies like AI and high-bandwidth memory. In 2024, advanced packaging revenue alone hit ~$500 million and is projected to exceed $800 million in 2025. This segment is crucial because it addresses the growing complexity of chip production. The company’s tools help customers manage intricate designs and larger semiconductor devices.

On January 31, Deutsche Bank raised the company’s stock target to $850 from $725, while maintaining a Buy rating. The bank cited the company’s solid revenue growth for this sentiment, which was driven by high-bandwidth memory and leading-edge spending. Analysts predict that KLA Corp. (NASDAQ:KLAC) will outperform peers due to increasing semiconductor manufacturing complexity.

KLA Corp. (NASDAQ:KLAC) is seen as a strong long-term investment despite short-term China demand concerns, due to its inherent advantages and growth potential in other regions. Parnassus Core Equity Fund stated the following regarding the company in its Q4 2024 investor letter:

“We also added several new positions, including two in Information Technology: Workday, a category leader for enterprise cloud applications for finance and human resources, and KLA Corporation (NASDAQ:KLAC), a leader in semiconductor process control. KLA, a leader in semiconductor process control, benefits from inherently high switching costs, structurally higher demand for advanced semiconductors and increasingly complex semiconductor manufacturing. The company has a strong management team that is positioning it well for long-term growth. Concerns about weaker demand in China have impacted KLA’s stock price recently, but we believe the secular growth in other regions could offset the risk in the longer term.”