3. KLA Corporation (NASDAQ:KLAC)
Breakline Capital’s Stake Value: $7,210,000
Percentage of Breakline Capital’s 13F Portfolio: 9.72%
Number of Hedge Fund Holders: 49
KLA Corporation (NASDAQ:KLAC) provides semiconductor and related nano-electronics companies with process control and yield management solutions. A total of 49 hedge funds were bullish on KLA Corporation (NASDAQ:KLAC) in Q4 2021, up from 44 funds in the previous quarter. Alkeon Capital Management is the leading shareholder of KLA Corporation (NASDAQ:KLAC), with 1.69 million shares worth $726.43 million.
On March 18, KeyBanc analyst Steve Barger decreased his price objective on KLA Corporation (NASDAQ:KLAC) from $480 to $440 and maintained an Overweight rating on the stock. In a research note to investors, Barger adopted a cautious stance on the firm’s industrial and semi-cap equipment coverage, noting persistent uncertainty surrounding Russia’s invasion of Ukraine, further inflationary rises in commodities and energy costs, and COVID-related disruptions in Asia.
Breakline Capital also strengthened its position in KLA Corporation (NASDAQ:KLAC) by buying 3,725 additional shares. This makes their stake in KLA Corporation (NASDAQ:KLAC) total 16,764 shares worth $7.21 million.
Palm Capital mentioned KLA Corporation (NASDAQ:KLAC) in its Q2 2021 investor letter. Here is what the fund said:
“A final example of our thinking is in the semiconductor industry. Because of the extreme complexity and significant costs in the manufacturing process, the industry has become highly specialized. It has fragmented into three types of companies – the designers of chips, the manufacturers, and those that make equipment for the manufacturers.
Revenue for designers is somewhat stable because of patents. And even when patents expire, designs are not easily copied, and customers don’t easily switch because this would typically involve a redesign of their product and the risk that the new design does not work as well. However, revenue is still dependent on the length of the lifecycle of end products they are used for, how long it takes for those products to be replaced with new technology and the success of designers’ R&D into new designs. So, while near term revenue and profit margins are typically stable, medium to long term revenue and profits are uncertain. And the large customers in this industry such as Apple, Google and Amazon are all beginning to design their own chips, raising this uncertainty…
…On the other hand, revenue and profits for the companies that design and manufacture equipment for the manufacturers are steadier. An example of a company we like in this space is KLA. KLA provides tools and solutions to help manufacturers monitor and improve their highly complex manufacturing process and reduce costs. These are critical services to the manufacturers. Their tools are found in every major manufacturer globally. And the uniqueness of these tools is evidenced by KLA’s market share which is more than four times its nearest competitor. Regardless of which design is successful in the future or which manufacturer manages to take the lead, KLA’s tools will almost certainly still be needed. Its revenues and profits are less affected by technological change and therefore less uncertain than that of the designers and manufacturers.”
