In this piece, we will look at the best semiconductor equipment stocks to buy according to hedge funds.
While most focus in the semiconductor industry is on the Taiwan Semiconductor Manufacturing Limited (NYSE:TSM), the complexity of chip fabrication means a myriad of firms are indispensable when it comes to production. TSMC held a commanding 70.2% market share of the global foundry market in the second quarter, according to data from market research firm TrendForce.
The Taiwanese firm’s dominance in the semiconductor fabrication market is a characteristic of the broader industry. This characteristic also applies to the semiconductor equipment sector. TSMC, and other chip manufacturers rely on lithography equipment from the Dutch firm ASML Holding N.V. (NASDAQ:ASML). Lithography is one part of the complex chip manufacturing process, with some other activities being etching, deposition, and doping. However, since lithography determines how small the circuits on a chip can be, it is the most crucial and creates high barriers to entry. As a result, ASML holds a 100% share of the global extreme ultraviolet lithography market, according to DBS Bank Singapore.
The importance and the geography of the semiconductor equipment industry were discussed by Vikas Pershad of M&G Investments in an appearance on CNBC in July. Pershad discussed the industry and commented that “If you look at semiconductor production equipment companies in North Asia, Japan and South Korea in particular, we are more underweight now than we have been in a long time. A part of it is that many of these companies have rallied. . . SPE companies we are underweight there. The reason for that is the increased competition from China.”
Our Methodology
To identify the best semiconductor equipment stocks to buy, we used the Finviz stock screener to sift out the 20 most valuable US-listed semiconductor equipment stocks. The stocks were ranked by the number of hedge funds that had owned a stake in them during Q2 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows 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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
13 Best Semiconductor Equipment Stocks to Buy According to Hedge Funds
13. Photronics, Inc. (NASDAQ:PLAB)
Number of Hedge Fund Holders In Q2 2025: 25
Photronics, Inc. (NASDAQ:PLAB) is a specialty semiconductor manufacturing equipment firm that primarily makes and sells photomasks. Photomasks are used by chip manufacturers to transfer a chip’s design onto the wafer by blocking light in specific areas.
Photronics, Inc. (NASDAQ:PLAB)’s shares have lost 9.6% year to date. One dip came after the firm reported its latest earnings report in August. The results saw Photronics, Inc. (NASDAQ:PLAB) report $210 million in revenue and $0.51 in earnings per share. The revenue marked a 0.3% annual drop while the earnings per share were flat.
However, while Photronics, Inc. (NASDAQ:PLAB)’s shares have struggled, the firm might be making inroads into more markets. A report from the Korean publication The Elec claimed in late September that Samsung had outsourced its lower-end masks to the firm, while Photronics, Inc. (NASDAQ:PLAB) also has a joint research and development agreement with IBM to develop photomasks for 5-nanometer and 7-nanometer manufacturing processes.
12. Kulicke and Soffa Industries, Inc. (NASDAQ:KLIC)
Number of Hedge Fund Holders In Q2 2025: 28
Kulicke and Soffa Industries, Inc. (NASDAQ:KLIC)’s chip manufacturing equipment serves in the final assembly of a chip, which sees manufacturers attach balls to the package to enable it to transfer data and communicate with other parts of a computer. It is one of the oldest firms of its kind and was set up in 1951.
Kulicke and Soffa Industries, Inc. (NASDAQ:KLIC)’s shares have lost 18% year-to-date. It’s been relatively quiet on the news front for the firm, except for some executive changes. On October 14th, Kulicke and Soffa Industries, Inc. (NASDAQ:KLIC) announced that its Executive Vice President and General Manager, Chan Ping Chong, would retire on December 1st and its Vice Presidents and General Managers of Wire Bonding and Advanced Solutions, Ivy Qin and John Molnar, would report to CEO Fusen Chen.
Just two weeks later, Kulicke and Soffa Industries, Inc. (NASDAQ:KLIC) announced that Mr. Chen would leave his role due to health reasons and be replaced by an interim CEO.
11. Axcelis Technologies, Inc. (NASDAQ:ACLS)
Number of Hedge Fund Holders In Q2 2025: 29
Axcelis Technologies, Inc. (NASDAQ:ACLS) is a specialty semiconductor equipment manufacturing firm. It primarily deals with the ion implantation process through its implanters. Ion implantation in the chip manufacturing process allows fabrication companies to introduce different properties into the silicon wafers. These properties include wear resistance and conductivity, among others.
B. Riley maintained a Neutral rating on Axcelis Technologies, Inc. (NASDAQ:ACLS)’s on November 5th. The firm also reduced the share price target to $84 from $85. The rating and price target came after Axcelis Technologies, Inc. (NASDAQ:ACLS) reported its latest earnings report. The results saw the firm post $213 million in revenue and $1.21 in earnings per share. The figures beat analyst estimates of $200 million and $1.01.
Apart from B. Riley’s coverage and the earnings, it’s been relatively quiet for Axcelis Technologies, Inc. (NASDAQ:ACLS) on the news front. The firm announced in October that it would merge with Veeco Instruments through an all-stock merger expected to have a $4.4 billion enterprise value. Veeco is also a semiconductor equipment company, and it makes and sells etching, deposition, ionization, and other equipment.
10. FormFactor, Inc. (NASDAQ:FORM)
Number of Hedge Fund Holders In Q2 2025: 29
FormFactor, Inc. (NASDAQ:FORM)’s products allow chip manufacturers to test their products for bugs, failure points, and temperature requirements. Its shares have gained 22% year-to-date, primarily on the back of a major 39% jump in late October.
The stock surged in October after FormFactor, Inc. (NASDAQ:FORM) third-quarter earnings report. The results saw the firm deliver solid performance across all metrics. Its $202 million in revenue, $0.33 in adjusted EPS, $210 million in midpoint fourth quarter guidance, and $0.35 in midpoint fourth quarter EPS guidance handily beat analyst estimates of $200 million, $0.25, 199 million, and $0.29.
Apart from the earnings report, FormFactor, Inc. (NASDAQ:FORM) has been quiet on the news front. However, during the earnings call, management discussed several aspects of the firm’s performance, such as weakness in the CPU market. This weakness has also led to Intel struggling, and then rising after its latest earnings. Here is what FormFactor, Inc. (NASDAQ:FORM)’s management shared about the CPU segment during the call:
“Despite broader indications of the beginning of a PC recovery, we’re not experiencing significant growth in probe cards for CPU applications. We believe this is because the increased demand is being served by our customers’ existing legacy node designs, where they’re able to employ their existing probe card fleet. As a reminder, probe cards are a device-specific consumable. And as this customer ramps volume on their new designs on new leading-edge silicon nodes, we expect to see increased demand for probe cards and CPU applications.
This current situation also highlights the need to execute our strategy to be a key supplier to all the leading customers in the industry and we continue to build the foundation for market share gains at a large fabless CPU manufacturer. Having achieved qualification in a specific application with this customer earlier this year, we’re now building on that penetration and qualifying our market-leading Apollo MEMS probe card technology on a mainstream CPU device that’s forecasted to ramp in volume next year.”
9. ACM Research, Inc. (NASDAQ:ACMR)
Number of Hedge Fund Holders In Q2 2025: 33
ACM Research, Inc. (NASDAQ:ACMR) is a mid-sized California-based firm. It makes and sells packaging equipment, which is used by chip manufacturers after they have completed the fabrication process and cut the wafer into chips. ACM Research, Inc. (NASDAQ:ACMR)’s shares have gained 98.6% year-to-date but have lost 20.5% since Tuesday’s close.
The dip occurred after the firm reported its third-quarter earnings. The results saw ACM Research, Inc. (NASDAQ:ACMR) report $269.6 million in revenue and $0.36 in earnings per share. The firm also reduced the high end but increased the low end of its full-year revenue guidance from an earlier $850 million to $950 million to $875 million to $925 million. Heading into the results, analysts had expected ACM Research, Inc. (NASDAQ:ACMR) to earn $252 million in revenue, $0.55 in earnings per share, and post a midpoint guidance of $916 million.
ACM Research, Inc. (NASDAQ:ACMR)’s packaging tools target a segment of the chip manufacturing process that has proven to be a bottleneck when it comes to AI chips. When asked about the “ramp” into AI opportunities, here is what management said during the third-quarter earnings call:
“Okay. Well, and the panel has been real hard, right, in this year, especially a major customer in Taiwan real promoting the panel business. We believe panel is a way to solving the large area AI chip, right, packaging with HBM together. So all the wafer level is a lot of, I call the area. So with the efficiency of the using the area. So panel packaging, one key is plating technology, right? I should say a lot of people in the copper plating for panel is a vertical style. And we are probably the first one to propose the horizontal and cover plating for the panel, which also we got the 3D Insight award, Innovation Technology award from USA. We believe we really have a good solution and they can play their panel uniformly and there will be a fill requirement of all this either 310×310 or 515×510.
By the way, we’re going to ship one of the panel plating tool in the fourth quarter. And also, we’re engaging with multiple customers for the panel packaging business in Taiwan and U.S. and also in China — Mainland China.”
8. Amkor Technology Inc (NASDAQ:AMKR)
Number of Hedge Fund Holders In Q2 2025: 33
Amkor Technology Inc (NASDAQ:AMKR) has shaped up to become an important company when it comes to the US government’s push towards domestic chip fabrication. It makes and sells equipment used in the semiconductor packaging process. Packaging connects the AI chips, made by firms such as TSMC, to memory and other components to enable them to function in data centers.
The firm has partnered up with TSMC to expand packaging capabilities at the latter’s US chip fabrication plant in Arizona. Amkor Technology Inc (NASDAQ:AMKR) has also partnered up with Apple to package chips built for the company by TSMC. The firm also saw Aletheia Capital initiate coverage for its shares and set a $62 price target earlier this month. As part of its note, Aletheia cited “the surging demand for CoWoS packaging and the America Manufacturing initiative” as two key tailwinds for the shares.
“It’s the only outsourced assembly and test manufacturing with a significant presence in the United States while also having presence overseas,” said Nancy Prial, Co-CEO & Senior Portfolio Manager at Essex Investment Management for Amkor Technology Inc (NASDAQ:AMKR) in an appearance on CNBC on September 30th.
7. Onto Innovation Inc. (NYSE:ONTO)
Number of Hedge Fund Holders In Q2 2025: 37
Onto Innovation Inc. (NYSE:ONTO)’s products cater to several parts of the chip manufacturing process. These include defect inspection, metrology, and packaging. The shares have lost 23% year-to-date despite the AI-generated tailwinds that have helped the semiconductor sector.
The most recent dip in Onto Innovation Inc. (NYSE:ONTO)’s shares came yesterday after the firm reported its earnings report for the third quarter. The results saw it post $218 million in revenue and $0.92 in earnings per share. Analysts, on the other hand, were expecting Onto Innovation Inc. (NYSE:ONTO) to earn $220 million in revenue and $0.89 in earnings per share.
Onto Innovation Inc. (NYSE:ONTO) has also been expanding its operations to grow its presence in the semiconductor supply chain and AI manufacturing. The firm announced in June that it would buy the materials business of Hungarian-origin firm Semilab. Onto Innovation Inc. (NYSE:ONTO) also announced in September that its G6 metrology system would target leading-edge chip fabrication technologies such as gate-all-around (GAA) processes.
6. Entegris, Inc. (NASDAQ:ENTG)
Number of Hedge Fund Holders In Q2 2025: 54
Entegris, Inc. (NASDAQ:ENTG) helps chip manufacturers in the deposition and cleaning phases of chip manufacturing. Through deposition, chip manufacturers deposit materials on a silicon wafer before removing them to print circuits. Additionally, the wafer is cleaned multiple times throughout chip fabrication to ensure purity.
However, while semiconductor design stocks with exposure to AI have thrived in 2025, Entegris, Inc. (NASDAQ:ENTG)’s shares have lost 11.9% year-to-date. The most recent major dip in the shares came in October when the stock closed 11% lower on the 10th. More recently, the stock fell in late October after the firm’s downbeat fiscal fourth quarter revenue guidance. During the quarter, Entegris, Inc. (NASDAQ:ENTG) posted $807 million in revenue and $0.72 in adjusted earnings. Its revenue beat estimates while EPS met them. Yet, the midpoint fourth quarter guidance of $810 million fell below estimates of $826.9 million.
As Entegris, Inc. (NASDAQ:ENTG)’s EPS met estimates, during the earnings call, the firm’s management shared its plans on how to improve profitability:
“Our second priority is accelerating the qualification and ramp of our new facilities in Taiwan and Colorado. Ramping these sites is critical to meeting future demand and offsetting the margin pressure driven by the cost of these investments, including incremental depreciation and foregone fixed cost leverage. Our Taiwan facility is expected to increase volume in 2026 and our Colorado facility, which has just been put into service, is expected to substantially complete customer product qualifications next year.”
5. KLA Corporation (NASDAQ:KLAC)
Number of Hedge Fund Holders In Q2 2025: 58
KLA Corporation (NASDAQ:KLAC) is one of the largest semiconductor equipment companies in the sector. Its products cover several areas of chip production, such as deposition, etching, inspection, and design solutions for the PCB market. The shares have gained more than 89% year-to-date.
During this time period, KLA Corporation (NASDAQ:KLAC) has experienced favorable and unfavorable attention from analysts. For instance, Barclays upgraded the stock to Overweight from Equalweight in late October and bumped the share price target to $1,200 from $700. A key role in the bank’s optimism was its belief that KLA Corporation (NASDAQ:KLAC) was relatively insulated from a drop in Chinese revenues due to lower semiconductor capital equipment spending.
The upgrade from Barclays came a month after Morgan Stanley had downgraded the shares to Equalweight from Overweight and increased the share price target to $1,093 from $928. KLA Corporation (NASDAQ:KLAC)’s fiscal first-quarter earnings report, released in late October, saw the firm’s $8.81 in EPS and $3.21 billion in revenue beat analyst estimates of $8.60 and $3.17 billion.
4. Teradyne, Inc. (NASDAQ:TER)
Number of Hedge Fund Holders In Q2 2025: 60
Teradyne, Inc. (NASDAQ:TER), another major semiconductor equipment firm, caters to chip manufacturers’ inspection, metrology, reticle and wafer inspection, dicing, etching, and other needs. With a market value in excess of $28 billion, Teradyne, Inc. (NASDAQ:TER) is one of the most valuable firms of its kind and counts big-ticket semiconductor companies such as Intel and IBM among its customers.
Teradyne, Inc. (NASDAQ:TER) ‘s shares experienced significant activity in late October when they jumped by more than 20%. The shares gained after the firm’s fiscal third-quarter earnings report. The results saw Teradyne, Inc. (NASDAQ:TER) report $769 million in revenue and $0.85 in EPS. Both these figures beat estimates, and the firm shared good news through guiding $1.33 in midpoint fourth quarter EPS while analysts were expecting $1.02.
Commenting on the stock on October 1st, CNBC’s Jim Cramer shared:
“Next, Teradyne, another old-line tech company. This one makes test and measurement equipment for the semiconductor industry, among a host of others. Teradyne has always been an incredibly well-run company, and it’s been a spawning ground for some incredible execs. Stock was up 53% for the quarter.”
3. ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders In Q2 2025: 78
ASML Holding N.V. (NASDAQ:ASML) is indispensable when it comes to the semiconductor manufacturing equipment industry. As we discussed in the introduction to this piece, the firm is the sole global supplier for high-end extreme ultraviolet (EUV) lithography scanners. These scanners are responsible for ensuring that chip manufacturers can reduce transistor sizes on chips for performance and power efficiency enhancements.
ASML Holding N.V. (NASDAQ:ASML)’s shares have gained more than 45% year-to-date as they have benefited from tailwinds stemming from AI chip enthusiasm. Rothschild Redburn upgraded the shares to Buy from Neutral and raised the share price target to €1,200 from €900, as it cited the firm’s High NA EUV machines. These machines are the most advanced lithography machines in the world, and their demand is central to ASML Holding N.V. (NASDAQ:ASML)’s performance.
Rothschild noted that stitching and packaging advances have removed some of the uncertainty surrounding the machines. Since High NA scanners increase the resolution of the circuits printed, the surface area of the wafer they can target is lower than simple EUV scanners. As a result, chip manufacturers have to combine the exposure fields to make chips.
2. Applied Materials Inc (NASDAQ:AMAT)
Number of Hedge Fund Holders In Q2 2025: 81
Applied Materials Inc (NASDAQ:AMAT) sells a variety of machines used in several parts of the chip fabrication process. These include etching, deposition, cleaning, and inspection. As a result, Applied Materials Inc (NASDAQ:AMAT)’s machines allow chip manufacturers to deposit and remove the materials that are used to print circuits and then clean the wafer before inspecting it for any defects.
Applied Materials Inc (NASDAQ:AMAT)’s shares have gained 40% year-to-date after recovering from the dip they experienced between mid-August and early September. According to media reports, the shares dipped in August after the firm’s fiscal third-quarter earnings report. While Applied Materials Inc (NASDAQ:AMAT) beat analyst EPS and revenue estimates, its fiscal fourth-quarter EPS and revenue guidance of $2.11 and $6.7 billion missed analyst estimates of $2.39 and 7.34 billion. The lower guidance was due to uncertainty in its China sales as the impact of tariffs was unclear.
Applied Materials Inc (NASDAQ:AMAT) is due to report its fiscal fourth-quarter earnings on November 13th. The average estimate of 26 analysts posted on Yahoo Finance for the firm’s revenue is $6.68 billion, while for the revenue it is $2.1.
1. Lam Research Corporation (NASDAQ:LRCX)
Number of Hedge Fund Holders In Q2 2025: 85
Lam Research Corporation (NASDAQ:LRCX) primarily makes and sells etching and deposition machines. Its deposition equipment also enables atomic-level deposition, which is one of the most advanced technologies of its kind. Lam Research Corporation (NASDAQ:LRCX) is one of the largest semiconductor manufacturing equipment firms of its kind that is traded on US markets.
Lam Research Corporation (NASDAQ:LRCX) is one of the top-performing semiconductor equipment stocks right now as its shares have gained 119% year-to-date. The firm is also a dividend-paying stock, and it declared a quarterly dividend of $0.26 per share last week on Thursday. In October, Lam Research Corporation (NASDAQ:LRCX) also forecast fiscal second-quarter revenue of $5.2 billion, which overshot LSEG estimates of $4.81 billion by a wide margin.
CNBC’s Jim Cramer discussed Lam Research Corporation (NASDAQ:LRCX) with Harvard Business School recently. Here is what he said:
“Right now, I know this is going to be really, I, it’s going to be boring, but I would still go with storage. That’s the problem… we just don’t have enough storage, so anybody who has it, because that, I’m talking about storage type derivative, like Lam Research, like KLA, like Applied Materials.”
While we acknowledge the potential of LRCX to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than LRCX and that has 100x upside potential, check out our report about this cheapest AI stock.
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