We just covered Billionaire Dan Loeb Pivots to AI and Sells Old Economy Stocks: His Top 7 AI Picks. KLA Corp. (NASDAQ:KLAC) ranks #5 (see Billionaire Dan Loeb’s Top 5 AI Stock Picks).
Billionaire Dan Loeb’s Stake: 110,000 Shares Valued at Approximately $16.20 Million (NEW position)
KLA Corp. (NASDAQ:KLAC) plays a key role in the AI revolution because it makes the machines used to inspect and measure semiconductor chips during manufacturing — essentially the quality control layer of every major fab on the planet. It holds a 58% global market share in process control, meaning most of the world’s chip manufacturers rely on KLA equipment to ensure their chips come out correctly.
KLA Corp. (NASDAQ:KLAC) sits at the center of every major semiconductor tailwind right now. As chip geometries shrink down to 2nm, the inspection and metrology requirements become exponentially more demanding — older machines simply can’t detect flaws at that level of precision, which forces chipmakers to upgrade their KLA equipment with every new node generation. Hyperscalers are projected to spend over $725 billion on AI infrastructure in 2026 alone, which flows directly into chip manufacturing demand, which flows directly into KLA.
KLA Corp. (NASDAQ:KLAC) targets $26 billion in revenue by 2030, representing a 13–17% revenue CAGR, alongside gross margin expansion to 63.5%. EPS is expected to grow around 34% in FY2027, outpacing peers like Applied Materials and Entegris on both volume and growth rate.
Aristotle Growth Equity Fund stated the following regarding KLA Corporation (NASDAQ:KLAC) in its fourth quarter 2025 investor letter:
“KLA Corporation (NASDAQ:KLAC) contributed to performance in the fourth quarter as leading-edge logic and memory customers accelerated capital spending to support advanced-node transitions. The company is benefiting from increased adoption of advanced packaging and extreme ultraviolet-related (EUV) inspection, where KLA maintains a technology leadership position, and investors continued to increase estimates for semiconductor capital equipment spending growth in 2026 and 2027 from prior consensus (Click Here to Read the Letter in Detail).”
While we acknowledge the risk and potential of KLAC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than KLAC and that has 10,000% upside potential, check out our report about the cheapest AI stock.
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