Semiconductor equipment stocks have been on the upswing lately amid an improving outlook for the sector. Two major players received price-target hikes on Tuesday: KLA and Lam Research.
IBD's semiconductor equipment industry group ranks No. 31 out of 197 groups. Three months ago, it ranked 163. And six months ago, it was No. 192.
Oppenheimer analyst Edward Yang on Tuesday reiterated his outperform ratings on KLA and Lam. He increased his price target on KLA to 950 from 740 and on Lam to 110 from 80.
Yang made the price-target hikes after meeting with company officials to discuss the state of the semiconductor equipment market and their respective positions.
KLA stock on Tuesday broke out of a 49-week consolidation pattern at a buy point of 896.32, according to IBD MarketSurge charts. However, it ended the regular session up just a fraction to 893. Earlier on the stock market today, KLA stock was up as much as 2.5% to an all-time high of 914.83.
Meanwhile, Lam stock advanced 1.7% to 95.01 in intraday trading only to reverse lower. It ended the regular session down 0.8% to 92.66.
On May 29, Lam stock hit a buy point of 86.04 out of a cup-with-handle base, MarketSurge charts show. It pulled back sharply the next day, before continuing its ascent.
Semiconductor Equipment Stocks On The Rise
KLA stock has a best-possible IBD Composite Rating of 99. It is tied for first place in the semiconductor equipment industry group with Nova, according to IBD Stock Checkup. Lam stock ranks third with a Composite Rating of 97.
IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
In a client note, Yang said his visit with KLA executives reinforced his confidence in the company's leading-edge position. He sees KLA making market share gains in AI-driven niches like advanced packaging.
As for Lam Research, the company has "a clear line-of-sight into an unusually large, multiyear $40 billion NAND (memory chip) upgrade wave," Yang said. Lam also is positioned to benefit from AI-fueled demand for its 3D scaling technology in deposition and etch tools, he said.
KLA stock is on three IBD lists: Big Cap 20, Long-Term Leaders and Tech Leaders. Lam and Nova are on the IBD Tech Leaders list.
Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
