AMAT vs KLAC: Applied Materials (+100% YTD) Holds Momentum Edge Over KLA's Recent -9% Pullback
Key Takeaways
- Different roles in the chip ecosystem: AMAT is a materials-engineering and deposition leader, while KLAC dominates process control, inspection, and yield management.
- Momentum favors AMAT: AMAT shares have more than doubled this year, while KLAC has recently pulled back roughly 9% in a month on margin and execution concerns.
- Margins favor KLAC: KLAC posts gross margins around 62%, well above AMAT's roughly 50%, though both carry premium valuations.
- Shared AI tailwind: Both companies are leveraged to artificial intelligence (AI) infrastructure, high-bandwidth memory (HBM), and advanced packaging growth.
- Risk profiles differ: KLAC has heavier China revenue exposure (about 30% of recent fiscal-year sales) and faces export-control and tariff sensitivity.
Why This Comparison Matters for Investors
Applied Materials and KLA Corporation are two of the most important suppliers to the global semiconductor manufacturing industry, yet they play distinctly different roles in the production line. Applied Materials provides the materials-engineering and deposition systems used to build chips, while KLA supplies the inspection and metrology tools that ensure those chips are manufactured correctly. This stock comparison is relevant to investors and traders who want to understand how relative performance, market positioning, and AI-driven demand are shaping two industry leaders that often move together but are not interchangeable.
Applied Materials Overview and Recent Performance
Applied Materials (AMAT) is the world's largest supplier of semiconductor fabrication equipment, offering a broad portfolio spanning deposition, etch, materials engineering, and related services. In recent weeks, the stock has traded near elevated levels after a powerful rally that saw shares more than double over the past year. The company reported record fiscal third-quarter revenue of roughly $9.12 billion, up about 25% year over year, with gross margin near 50%. I also checked this using Tickeron’s AI Trend Prediction Engine to confirm the strength of the recent uptrend.
Sentiment has been supported by strong AI-linked demand across leading-edge logic, DRAM, and advanced packaging, as well as the launch of six new chipmaking systems. Applied Materials has also expanded its $5 billion EPIC Center initiative, announcing collaborations with Intel, Besi, and KIOXIA focused on next-generation transistors, interconnects, and packaging. Its Applied Global Services (AGS) business reached a record $1.78 billion in quarterly revenue, reflecting a growing recurring revenue stream. The main point of debate is valuation, with the stock trading well above typical industry price-to-sales multiples.
KLA Overview and Recent Performance
KLA Corporation (KLAC) is the leading provider of process control and yield-management systems, including wafer inspection and metrology tools that semiconductor makers rely on to detect defects. The company completed a ten-for-one stock split in mid-2026 and reported record June-quarter revenue of about $3.66 billion, up 15% year over year, with gross margin near 62%.
Despite strong fundamentals, KLAC shares have underperformed in recent market activity, pulling back roughly 9% over the past month as investors weighed near-term margin pressure from higher memory-component costs and tariffs, along with execution risks tied to capacity expansion. The company raised its calendar 2026 outlook for the wafer fabrication equipment (WFE) market to the low-$150 billion range and expects advanced-packaging process-control revenue to grow more than 70%. Management has also outlined a 2030 target of roughly $26 billion in revenue, implying a compound annual growth rate of 13% to 17%. China exposure and geopolitical uncertainty remain key watchpoints. From what I see, the recent pullback creates a different risk-reward setup than AMAT.
Head-to-Head Comparison
The clearest contrast between these two companies is their positioning within the semiconductor value chain. Applied Materials is a broad-based equipment and materials leader whose scale gives it exposure across many chipmaking steps and reduces dependence on any single technology cycle. KLA, by contrast, is a more focused franchise built on process control, where rising chip complexity tends to increase inspection and metrology intensity per wafer.
On profitability, KLA holds a structural edge, with gross margins near 62% compared with AMAT's roughly 50%. That efficiency supports KLA's higher forward earnings multiple, though both stocks trade at premiums to the broader sector. Growth drivers overlap significantly: both benefit from AI infrastructure spending, HBM adoption, and advanced packaging, but KLAC's momentum has cooled in recent weeks while AMAT's has remained stronger.
Risk profiles also diverge. KLA derives close to 30% of revenue from China, making it more sensitive to export controls and tariffs. Applied Materials carries its own China-related regulatory exposure but is comparatively more diversified across customers and product categories. Both are cyclical businesses tied to semiconductor capital spending. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Using Tickeron AI Trading Bots for Semiconductor Analysis
In my own workflow, Tickeron’s AI Trading Bots have become a useful way to monitor names like these alongside broader market signals. The platform offers a range of automated strategies that scan thousands of tickers and highlight setups based on current conditions, which helps me cross-check momentum and pattern data without replacing my fundamental review. Exploring the available bots can give a practical edge when evaluating relative performance between equipment suppliers.
Disclaimer
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KLAC's MACD Histogram crosses above signal line
The Moving Average Convergence Divergence (MACD) for KLAC turned positive on September 18, 2026. Looking at past instances where KLAC's MACD turned positive, the stock continued to rise in 40 of 48 cases over the following month. The odds of a continued upward trend are 83%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on September 23, 2026. You may want to consider a long position or call options on KLAC as a result. In 73 of 98 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 74%.
KLAC moved above its 50-day moving average on September 28, 2026 date and that indicates a change from a downward trend to an upward trend.
The 10-day moving average for KLAC crossed bullishly above the 50-day moving average on October 01, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 12 of 15 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 80%.
Following a +6.14% 3-day Advance, the price is estimated to grow further. Considering data from situations where KLAC advanced for three days, in 265 of 342 cases, the price rose further within the following month. The odds of a continued upward trend are 77%.
Bearish Trend Analysis
The 10-day RSI Indicator for KLAC moved out of overbought territory on October 06, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 55 similar instances where the indicator moved out of overbought territory. In 34 of the 55 cases, the stock moved lower in the following days. This puts the odds of a move lower at 62%.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 10 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where KLAC declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 59%.
The Aroon Indicator for KLAC entered a downward trend on September 24, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 13 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is 15 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 37 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 60, placing this stock slightly better than average.
The Tickeron Price Growth Rating for this company is 38 (best 1 - 100 worst), indicating steady price growth. KLAC’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 88 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: KLAC's P/B Ratio (38.911) is very high in comparison to the industry average of (8.078). P/E Ratio (51.686) is within average values for comparable stocks, (161.623). KLAC's Projected Growth (PEG Ratio) (1.809) is slightly higher than the industry average of (0.801). Dividend Yield (0.004) settles around the average of (0.002) among similar stocks. P/S Ratio (16.260) is also within normal values, averaging (27.897).
The Tickeron Seasonality Score of 95 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
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General Information
a manufacturer of process control and yield management solutions for the semiconductor and related nanoelectronics industries
Industry ElectronicProductionEquipment
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