Both KLA and SanDisk are benefiting from AI infrastructure spending, but SanDisk currently has the edge with stronger revenue and earnings momentum, higher margins, and improved visibility through multiyear customer deals. KLA offers solid process-control leadership but faces valuation concerns. SanDisk holds a Zacks Rank #1 (Strong Buy) while KLA carries Rank #2 (Buy).

KLA (KLAC) reported fiscal Q4 2026 earnings of $1.05 per share, beating estimates by 5%, with revenues of $3.66 billion up 15.2% year-over-year. The company benefited from AI infrastructure investment and strong foundry/logic demand. KLA issued strong Q1 FY2027 guidance of $4 billion in revenues and raised its calendar 2026 wafer fabrication equipment market outlook to the low-$150 billion range. The stock has received a Zacks Rank #2 (Buy) rating with upward estimate revisions.

ASML's share price has surged above $1,700, making it a candidate for a stock split. However, recent semiconductor sector weakness and ASML's high valuation (37x forward earnings) suggest a split is unlikely in 2026, with 2027 or 2028 being more probable. The company has not conducted a forward split since 2000.

The iShares Semiconductor ETF (SOXX) offers diversified exposure to the AI memory supply chain, including memory producers, chip designers, and equipment suppliers. Growing demand for high-bandwidth memory in AI accelerators is creating supply shortages expected to persist beyond 2027. While the recent semiconductor sell-off has improved entry points, the ETF trades at a premium valuation (66x earnings) with concentrated holdings, presenting downside risks if AI spending slows or memory supply increases faster than expected.

The iShares Semiconductor ETF (SOXX) rose 12.6% in June, driven by three key themes: strong AI chip demand and capital spending, Trump's claims of Intel-Apple U.S. chip manufacturing deals, and Micron's blockbuster earnings revealing exceptional memory chip demand with supply substantially below demand. The ETF's broad-based exposure to 30 semiconductor companies, with capped weightings preventing Nvidia dominance, allowed investors to capture gains across multiple semiconductor plays including Applied Materials, KLA, Intel, and Micron, while some positions like Nvidia and Broadcom declined.

The global semiconductor equipment market is valued at $138.64 billion in 2025 and is expected to grow to $329.73 billion by 2035, with a CAGR of 9.05%. Growth is driven by rising AI and 5G adoption, government-backed fab investments, and increasing demand across consumer electronics, automotive, and telecommunications sectors. Wafer fabrication equipment dominates the market, while testing equipment and inspection & metrology segments show the fastest growth rates.

Daniel Loeb's Third Point hedge fund is increasing its AI exposure by acquiring significant positions in chip-equipment makers KLA Corporation, ASML Holding, and Lam Research. All three companies reported strong quarterly earnings that beat expectations, with positive guidance and analyst upgrades, reflecting robust demand driven by AI infrastructure buildout.

The Nasdaq 100 rose 1.1% on Thursday, led by semiconductor equipment makers rallying on positive analyst upgrades and AI data-center demand outlook. However, Oracle plunged 11.6% despite record earnings, citing a $40 billion financing plan and 162% increase in capital spending for AI infrastructure. Software stocks broadly declined while small caps and chip-related equities outperformed.

KLA Corporation outperformed the S&P 500 on Wednesday following a 25% price target increase from Cantor Fitzgerald analyst C.J. Muse to $2,000 per share. The upgrade was driven by KLA's raised advanced packaging revenue guidance to $1 billion, fueled by strong AI hardware demand. The analyst maintained an overweight recommendation ahead of the company's upcoming 10-for-1 stock split.

US semiconductor stocks rebounded strongly on Monday after a sharp selloff, with Intel, Micron, and Marvell among the biggest gainers. However, despite the recovery, these semiconductor stocks remain significantly overvalued according to Fair Value estimates. The article highlights alternative large-cap tech stocks trading at meaningful discounts (35.5%-60.5%) with strong growth prospects, including Futu Holdings and Leidos Holdings, which offer more attractive valuations than the crowded semiconductor sector.

U.S. stocks rebounded strongly on Monday following signs of de-escalation in the Middle East and a halt to semiconductor selloffs. The Nasdaq 100 led gains with a 2.1% jump, driven by a sharp recovery in chip stocks. The S&P 500 rose 0.8% while the Dow edged up 0.2%. Crude oil and Treasury yields eased as geopolitical tensions cooled, though rate-hike concerns persist following Friday's strong jobs report.

Bank of America analyst Vivek Arya identifies seven semiconductor stocks positioned for sustained outperformance in the AI era, driven by surging demand for AI chips and data center infrastructure. With AI data center equipment market projected to reach $1.7 trillion by 2030 (up from $264 billion in 2025), the key constraint is supply scarcity rather than demand. All seven stocks are rated Buy, with Nvidia offering the most upside at 71% to BofA's $350 price target.