Is KLA Corporation (KLAC) One of the Best Forever Stocks to Buy According to Hedge Funds?

KLA Corporation (NASDAQ:KLAC) is one of the best forever stocks to buy according to hedge funds. On December 15, analysts at Jefferies upgraded KLA Corporation (NASDAQ:KLAC) to a Buy, buoyed by accelerating artificial intelligence driven spending. Additionally, the research firm echoed a strong outlook for demand for leading-edge and advanced packaging.

Is KLA Corporation (KLAC) One of the Best Forever Stocks to Buy According to Hedge Funds?

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Jefferies expects the company to capitalize on the acceleration of hyperscalers’ capital expenditure and the inflection in ASIC adoption. Consequently, it expects a multi-year runway for semiconductor capital equipment. In addition, the research firm upgraded the stock to a Buy rating, citing expected growth in wafer fab equipment through 2026 and 2027.

Artificial intelligence continues to drive spending, supporting higher demand across leading-edge foundry memory and packaging. The company should also benefit from its outsized exposure to the Leading Edge as AI pushed capacity addition into the second half of next year. Consequently, the research firm has raised its revenue forecasts for KLA Corp to $14 billion for 2026 and $15.5 billion for 2027.

Meanwhile, on December 16, analysts at Bank of America raised their price target of KLA Corp to $1450 from $1400 while reiterating a buy rating. The upgrade comes amid expectations that next year will mark the mid-point of the 8- to 10-year upgrading cycle for traditional IT infrastructure.

KLA Corporation (NASDAQ:KLAC) designs, manufactures, and sells advanced process control equipment and services for the semiconductor and electronics industries, helping chipmakers find tiny defects, improve yields, and enhance quality in making logic chips, memory (like DRAM/NAND), LEDs, and more, essentially providing the high-tech tools to ensure flawless microchip production.

While we acknowledge the potential of KLAC 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 KLAC and that has 100x upside potential, check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.