KLA Corporation (NASDAQ:KLAC) is AI Stocks in the Spotlight for Investors. On December 15, Jefferies upgraded the semiconductor equipment maker to “Buy” and raised the price target to $1,500 from $1,100. The firm believes that KLAC’s run is “just beginning,” citing expanding AI accelerator use cases and a robust outlook for leading-edge and advanced packaging demand.
Besides KLAC, Jefferies also identified Nvidia and Broadcom as companies with sustainable demand from the build out of AI infrastructure. With chip complexity increasing, the firm sees upside for KLA as rising process control intensity plays directly on its strengths.
“We are seeing power and performance move to the forefront from AI servers, pushing node transitions faster and expanding the use case beyond handsets. The growth in expectations of accelerators ex-NVDA increases the demand at the bleeding edge.”
The firm further highlighted how packaging complexity is also rising, which requires more process control and benefits KLAC’s business model. China exposure was also highlighted.
“While China remains a concern, we believe China revenues are relatively derisked at 25% for C26 with history suggesting there is actually upside (Semi Caps continue to guide conservatively on China but the demand remains strong). We raise our PT to $1500 based on 30X our C28 EPS of $50.”
KLA Corporation (NASDAQ:KLAC) is a semiconductor manufacturing corporation engaged in the design, manufacture, and marketing of process control, process-enabling, and yield management solutions for the semiconductor and related electronics industries worldwide.
While we acknowledge the potential of KLAC as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 10 Trending AI Stocks on Wall Street and 10 AI Stocks on the Market’s Radar
Disclosure: None.
