KLA Corporation (KLAC) shares have gained 64.5% over the past year, outperforming peers and the broader tech sector, driven by strong AI infrastructure investments and semiconductor manufacturing demand. The company reported record Q4 fiscal 2026 revenues of $3.66 billion and expects $4 billion in Q1 fiscal 2027 revenues. With a $12.6 billion backlog (up 60% year-over-year) and visibility extending through 2027-2028, KLA is well-positioned for continued growth in advanced packaging and process control solutions.

ASML reported Q3 2026 earnings of $12.93 per share, beating estimates by 3.69%, with a 135.9% year-over-year surge. However, revenues of $11.66 billion missed expectations by 11.49%. Strong AI-driven demand for lithography systems and expanding installed-base revenues support growth, but capacity constraints, supply-chain bottlenecks, high R&D costs, and dependency on sustained customer investment pose significant risks. The company carries a Zacks Rank #4 (Sell) rating.

Integrated Power Services (IPS) has acquired Bold Renewables, effective October 9, 2026, to strengthen its renewable energy service offerings. Bold, headquartered in Windsor, Colorado, is the exclusive OEM source for Advanced Energy solar inverters and supports approximately 14,000 legacy inverters representing over 4 GW of capacity across North America. The acquisition positions IPS as a comprehensive aftermarket lifecycle inverter solutions provider across multiple markets.

ASML Holding N.V. plays a critical role in the AI ecosystem by providing advanced semiconductor manufacturing equipment, particularly EUV lithography systems that enable chipmakers to produce next-generation AI chips. The company integrates AI into its own operations to improve precision and efficiency. With the global AI market projected to reach $3.5 trillion by 2033, ASML is positioned to benefit from increased semiconductor supply chain investment, though it faces competition from Advanced Energy Industries and Applied Materials.

Advanced Energy Industries (AEIS) is outperforming the Computer and Technology sector year-to-date, gaining 45.3% compared to the sector average of 22.8%. AEIS holds a Zacks Rank #1 (Strong Buy) with analyst consensus earnings estimates up 23.4% in the past quarter. Digital Turbine (APPS) is also highlighted as an outperformer with 123.4% year-to-date gains and a Zacks Rank #2 (Buy).

ASML is well-positioned to capitalize on AI-driven demand for advanced semiconductors, with plans to ship approximately 65 Low-NA EUV systems in 2026 and expand capacity by 30% in 2027. However, growth remains dependent on sustained customer spending and faces headwinds from export restrictions, geopolitical tensions, and potential cyclical downturns in semiconductor capital spending.

Advanced Energy Industries (AEIS) stock has declined 21.8% since its last earnings report despite beating Q2 2026 expectations with 82.7% EPS growth and 30% revenue increase to $574.1 million. The company raised full-year 2026 guidance to low-to-mid-30% revenue growth and projects semiconductor revenues to grow nearly 50% year-over-year in H2 2026. Despite strong fundamentals and a Zacks Rank #1 (Strong Buy) rating, the stock has underperformed the S&P 500.

The global pyrometer market, valued at USD 544.55 million in 2025, is expected to grow to USD 1.15 billion by 2035 at a 7.57% CAGR. Growth is driven by industrial automation expansion and semiconductor manufacturing. Asia Pacific leads with over 30% market share, while fixed infrared pyrometers and metal processing applications dominate the market.

The Vanguard Russell 2000 ETF is outperforming the S&P 500 with an 18% year-to-date gain, driven by domestic-focused small-cap companies benefiting from U.S. government policies and AI infrastructure demand. However, rising inflation and anticipated interest rate hikes pose a significant risk, as 32% of Russell 2000 companies carry floating-rate debt that will become more expensive, potentially hampering their growth and earnings.

Advanced Energy Industries (AEIS) surged 16% after beating Q4 earnings expectations and reporting strong growth in data center and semiconductor markets. The company, which supplies precision power equipment for data centers and semiconductor production, saw data center revenue grow 101% year-over-year. Management expects data center revenue to grow over 30% in 2026, driven by AI-led demand and upcoming 800V HDC data center technology launching in 2027.

S&P Dow Jones Indices announced index changes effective January 30 and February 2, 2026. TTM Technologies, Dutch Bros, Advanced Energy Industries, and American Healthcare REIT will be promoted to the S&P MidCap 400, while Amneal Pharmaceuticals, Apellis Pharmaceuticals, and LegalZoom.com will join the S&P SmallCap 600. These changes follow several pending M&A transactions and corporate actions.

Bank of America semiconductor analyst Vivek Arya identifies five small- and mid-cap chip stocks positioned for outperformance in 2026, driven by AI infrastructure spending, rising chip complexity, and aerospace/defense demand. The stocks include Credo Technology (AI connectivity leader), MKS Inc (wafer equipment), Advanced Energy Industries (AI power demand), Teradyne (chip testing), and MACOM (optics and defense exposure).