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25. KLA Corporation (NASDAQ:KLAC)

Number of Hedge Fund Holders: 55  

KLA Corporation (NASDAQ:KLAC) markets process control and yield management solutions for the semiconductor industry. Oppenheimer recently started coverage of KLA Corporation (NASDAQ:KLAC) stock with a Perform rating and $750 price target. In an investor note on the firm, analyst Edward Yang detailed that KLA was by far the dominant provider of semiconductor process control tools that enhanced manufacturing yields, and one of the top five wafer fab equipment companies that make up 80% of total industry revenue.

The analyst further added that the firm had become the only oligopoly semicap that had consistently exceeded Street revenue estimates 100% of the time over the last three years, including the downcycle and US export curbs. He noted that the company had also become a huge beneficiary of artificial intelligence, as it had helped address the most pressing bottlenecks of both NVIDIA and the broader AI ecosystem.

Given that AI compute demand was doubling every six months, while hardware performance only improved every two years, there was a severe, structural shortage of advanced semiconductors and the tools needed to manufacture them, Yang explained.