Is KLA (KLAC) the Best Under-The-Radar AI Stock to Buy Now?

We recently published 10 Buzzing Tech and AI Stocks Everyone’s Talking About. KLA Corporation (NASDAQ:KLAC) is one of the stocks analysts were recently talking about.

Joseph Terranova, Senior Managing Director at Virtus Investment Partners, in a latest program on CNBC praised KLA and said the company is sitting “right next to” companies like Nvidia and Broadcom. Here is why the analyst likes the stock:

“In the case of…. KLA Corp (NASDAQ:KLAC), the reason that you’re owning these stocks, the buyback’s good, but that’s not the reason that you own these stocks. You own these semi-equipment names because they are fully participating in the buildout of the artificial intelligence infrastructure. And they’re in the right place. They’re sitting next to companies like Nvidia and Broadcom. They have direct relationships with both of them and they’re seeing significant expansion in terms of profit margins and earnings growth, and it’s one of the reasons why we have ownership with them.”

Parnassus Core Equity Fund stated the following regarding KLA Corporation (NASDAQ:KLAC) in its Q4 2024 investor letter:

“We also added several new positions, including two in Information Technology: Workday, a category leader for enterprise cloud applications for finance and human resources, and KLA Corporation (NASDAQ:KLAC), a leader in semiconductor process control. KLA, a leader in semiconductor process control, benefits from inherently high switching costs, structurally higher demand for advanced semiconductors and increasingly complex semiconductor manufacturing. The company has a strong management team that is positioning it well for long-term growth. Concerns about weaker demand in China have impacted KLA’s stock price recently, but we believe the secular growth in other regions could offset the risk in the longer term.”

While we acknowledge the potential of KLAC as an investment, 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 extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

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