We recently compiled a list of the 10 AI Stocks on Analysts’ Radars. In this article, we are going to take a look at where KLA Corp. (NASDAQ:KLAC) stands against the other AI stocks.
Despite DeepSeek and Qwen 2.5 disrupting the global tech sector, investors welcomed the impressive Q4 AI revenues from leading US tech firms like International Business Machines Corp. (NYSE:IBM). The company’s stock price reached an all-time high of $261 on January 30th as it reported GenAI’s book of business surpassing $5 billion since the segment’s inception.
“Three years ago, we laid out a vision for a faster-growing, more-profitable IBM. I’m proud of the work the IBM team has done to meet or exceed our commitments. With our focused strategy, enhanced portfolio, and culture of innovation, we’re well-positioned for 2025 and beyond and expect revenue growth of at least five percent and free cash flow of about $13.5 billion this year,” said IBM CEO Arvind Krishna.
While the S&P 500 sharply fell from its record high of 6,118 on January 23rd to 6,012 on January 27th, the benchmark index appears to have momentum in the past few days, climbing to 6,071 on January 30th.
However, several concerns remain about the adoption of AI, in terms of security and job losses. Code.org Founder and CEO Hadi Partovi said at the World Economic Forum that the risk isn’t people losing their jobs to AI, but losing work “to somebody else who knows how to use AI. That is going to be a much greater displacement.”
“It’s not that the worker gets replaced by just a robot or a machine in most cases, especially for desk jobs, it’s that some better educated or more modernly educated worker can do that job because they can be twice as productive or three times as productive,” he explained. “The imperative is to teach how AI tools work to every citizen, and especially to our young people.”
We selected AI stocks by reviewing news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
The inner workings of a semiconductor manufacturing facility, neon hued machines humming with activity.
KLA Corp. (NASDAQ:KLAC)
Number of Hedge Fund Holders: 61
KLA Corp. (NASDAQ:KLAC) supplies process control and yield management systems for the semiconductor, nanoelectronics, automotive, and data center industries. The company manufactures equipment like surface profilers, nano chemical testers, and KT pro equipment used in the production of wafers, integrated circuits, and printed circuit boards. KLA Corp. (NASDAQ:KLAC) is integrating AI and deep learning algorithms in wafer and PCB defect inspection and smart IC manufacturing processes through e-beam image and automation while maintaining yield and visibility to minimize errors and drive innovation without slowing down production
On January 31st, Deutsche Bank increased KLA Corp.’s (NASDAQ:KLAC) target price to $850 from $725 and retained a “Buy” rating. The brokerage said the company reported “yet another solid print,” with revenue upside fueled by consistent momentum in high-bandwidth memory and leading-edge spending. Analysts expect KLA Corp.’s (NASDAQ:KLAC) fundamentals to keep outperforming peers in the near term, arguing that the growing difficulty of semis manufacturing against an uncertain cyclical environment “should offer an attractive combination of both offensive and defensive traits.”
Overall KLAC ranks 2nd on our list of the AI stocks on analysts’ radars. While we acknowledge the potential of KLAC as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than KLAC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stock To Buy Now and Complete List of All AI Companies Under $2 Billion Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
