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KLA Corp: AI's Unsung Hero in Chip Innovation
20 Dec, 2025
Summary
- Jefferies names KLA Corp a top pick for 2026 AI chip infrastructure.
- KLA provides crucial process control and yield management solutions.
- The company boasts strong operating margins and robust free cash flows.
KLA Corporation is gaining significant attention as Jefferies designates it a top investment choice for 2026 within the burgeoning AI chip sector. Despite the spotlight often focusing on GPUs and custom silicon, analysts are increasingly recognizing the indispensable contributions of companies like KLA, which provide essential backend infrastructure for semiconductor innovation.
This recognition comes as investor interest shifts toward companies with sustainable demand drivers in AI, moving away from those reliant on cyclical consumer demand. KLA's strength lies in its specialized process control, inspection, and yield management solutions, crucial for foundries, logic chipmakers, and memory product manufacturers globally.
Financially, KLA presents a compelling case with impressive operating margins over 30 percent, a return on equity exceeding 100 percent, and consistently strong free cash flows. These robust metrics, coupled with its critical role in the AI supply chain, justify its premium valuation and position it as a key player for future growth.
