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ADI vs KLAC
Which Stock Would AI Choose? Analog Devices (ADI) vs. KLA Corporation (KLAC) Stock Comparison
Key Takeaways
- Different semiconductor niches: ADI is a leading analog and mixed-signal chipmaker serving diverse end markets, while KLAC dominates semiconductor process control and yield management equipment for chip manufacturers.
- Revenue scale and growth: KLAC reported fiscal 2025 revenue of $12.16 billion (+24% YoY), while ADI posted fiscal 2025 revenue of $11.0 billion (+17% YoY), reflecting different cyclical and secular drivers.
- Profitability contrast: KLAC delivers an industry-leading operating margin above 41%, whereas ADI generates strong adjusted margins around 42% but carries a significantly higher P/E (price-to-earnings) multiple.
- Capital return profiles: ADI offers a higher dividend yield (approximately 1.4%) with a payout ratio above 70%, while KLAC prioritizes aggressive share buybacks alongside a growing but lower-yielding dividend (approximately 0.6%).
- Risk dynamics: KLAC carries higher China-related geopolitical risk and greater stock volatility, while ADI offers broader end-market diversification and a more conservative balance sheet with lower leverage.
- AI exposure differs: KLAC benefits directly as an enabler of AI chip manufacturing infrastructure, while ADI captures AI demand indirectly through edge computing, data center, and industrial automation applications.
Introduction
Investors navigating the semiconductor space often face a strategic choice between companies that make chips and those that supply the tools to manufacture them. This comparison of Analog Devices (ADI) and KLA Corporation (KLAC) brings that distinction into focus. Both are leaders in their respective domains and benefit from long-term technology tailwinds, yet their business models, risk profiles, and market dynamics differ markedly. For traders assessing relative momentum or longer-term investors evaluating exposure to the semiconductor ecosystem, understanding how these two high-quality names stack up in the current environment offers practical insight into sector positioning and portfolio construction.
ADI Overview and Recent Performance
Analog Devices is a global semiconductor leader that bridges the physical and digital worlds, combining analog, digital, and software technologies into solutions for industrial, automotive, communications, and consumer markets. In recent months, ADI has demonstrated robust financial momentum, capping its fiscal 2025 with full-year revenue of $11.0 billion — a 17% increase year-over-year. The company's adjusted gross margin reached approximately 69.3% for the fiscal year, with adjusted operating margin near 41.9%, underscoring strong operational efficiency.
Sentiment around ADI has been supported by accelerating bookings across all end markets and a sustained cyclical recovery in the industrial segment. Free cash flow (FCF) generation has been a standout, reaching $4.3 billion for fiscal 2025, or 39% of revenue, with management returning 96% of that FCF to shareholders through dividends and share repurchases. The quarterly dividend of $0.99 per share signals confidence in cash flow durability. While macro uncertainty and trade policy fluctuations present near-term headwinds, ADI's diversified revenue base and increasing exposure to the intelligent edge — where AI-driven demand is expanding — have reinforced its relative resilience in recent market activity.
KLAC Overview and Recent Performance
KLA Corporation is the dominant provider of process control and yield management solutions for the semiconductor industry. Its systems — spanning wafer inspection, reticle inspection, metrology, and advanced packaging — are critical for chipmakers producing increasingly complex devices at leading-edge nodes. For fiscal 2025, KLAC delivered record revenue of $12.16 billion, representing 24% growth year-over-year, fueled by AI infrastructure investments that are accelerating demand for advanced logic and high-bandwidth memory (HBM) chips.
Recent quarters have seen KLAC achieve record quarterly free cash flow exceeding $1 billion, with full-year fiscal 2025 FCF reaching $3.75 billion (approximately 31% margin). The company's operating margin of roughly 41.2% leads its peer group, reflecting strong pricing power and operational discipline. Advanced packaging revenue has emerged as a significant growth vector, approaching an annualized run rate of $850–925 million. However, investor sentiment has been tempered by geopolitical headwinds: U.S. export controls affecting China — which historically represented just under 30% of KLAC's revenue — continue to create uncertainty around the service business growth trajectory. Management has de-risked its China outlook, but the regulatory environment remains a key variable for near-term performance.
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Head-to-Head Comparison
Though both companies reside in the semiconductor sector, their roles in the value chain create fundamentally different investment profiles. ADI is a chip designer and manufacturer whose fortune rises with broad-based demand across industrial automation, electric vehicles, 5G communications, and healthcare electronics. Its business benefits from long product lifecycles and deep customer relationships across thousands of applications. In contrast, KLAC is a capital equipment supplier whose revenue depends on chipmakers' willingness to expand or upgrade fabrication capacity — making it more cyclical and tied to wafer fab equipment (WFE) spending cycles.
On valuation, the divergence is notable. ADI currently trades at a higher P/E multiple (approximately 60–70x trailing earnings), partly reflecting its more stable earnings stream and lower beta of around 1.21. KLAC trades at a comparatively lower multiple (approximately 30–40x), but carries a higher beta near 1.51, indicating greater sensitivity to broader market swings and semiconductor cyclicality. From a profitability standpoint, KLAC's operating margin leads the sector, while ADI's adjusted margins are competitive but reflect a different cost structure tied to manufacturing rather than equipment sales.
Balance sheet strength also differentiates the two. ADI maintains a conservative debt-to-equity ratio of approximately 0.26, while KLAC operates with higher leverage at roughly 1.08 — a figure in the upper quartile for the industry. KLAC's higher debt load is offset by strong interest coverage (above 38x), but the contrast in capital structure is meaningful for risk-conscious investors. Geopolitically, KLAC faces more acute exposure through its China revenue dependency, while ADI's diversified end-market mix provides a degree of insulation from any single regulatory jurisdiction. Growth-wise, KLAC has demonstrated faster recent top-line expansion, but ADI's cyclical recovery in the industrial and communications markets offers its own momentum narrative.
Tickeron AI Verdict
Based on observable trends, Tickeron's AI-driven analytical framework would likely express a cautious preference for KLAC in the current environment, while acknowledging distinct strengths in ADI. KLAC's combination of industry-leading operating margins, record free cash flow generation, and direct exposure to secular AI infrastructure spending creates a compelling trend-following case. The company's ability to grow revenue by double digits even as it navigates China headwinds suggests underlying demand resilience that quantitative models tend to favor. However, ADI's lower volatility, conservative balance sheet, and higher dividend yield present a more defensive profile that may appeal to AI strategies optimized for risk-adjusted returns rather than absolute momentum. Ultimately, the probabilistic edge in current conditions tilts toward KLAC for trend consistency and catalyst density, though ADI's stability and diversification offer meaningful portfolio-level advantages that should not be overlooked.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
To compare these two companies we present long-term analysis, their fundamental ratings and make comparative short-term technical analysis which are presented below. The conclusion is ADI is a Hold and KLAC is a Hold.
Long-Term Analysis
It is best to consider a long-term outlook for a ticker by using Fundamental Analysis (FA) ratings. The rating of 1 to 100, where 1 is best and 100 is worst, is divided into thirds. The first third (a green rating of 1-33) indicates that the ticker is undervalued; the second third (a grey number between 34 and 66) means that the ticker is valued fairly; and the last third (red number of 67 to 100) reflects that the ticker is undervalued. We use an FA Score to show how many ratings show the ticker to be undervalued (green) or overvalued (red).
ADI’s FA Score shows that 1 FA rating(s) are green whileKLAC’s FA Score has 3 green FA rating(s).
- ADI’s FA Score: 1 green, 4 red.
- KLAC’s FA Score: 3 green, 2 red.
Short-Term Analysis
It is best to consider a short-term outlook for a ticker by using Technical Analysis (TA) indicators. We use Odds of Success as the percentage of outcomes which confirm successful trade signals in the past.
If the Odds of Success (the likelihood of the continuation of a trend) for each indicator are greater than 50%, then the generated signal is confirmed. A green percentage from 90% to 51% indicates that the ticker is in a bullish trend. A red percentage from 90% - 51% indicates that the ticker is in a bearish trend. All grey percentages are below 50% and are considered not to confirm the trend signal.
ADI’s TA Score shows that 2 TA indicator(s) are bullish while KLAC’s TA Score has 3 bullish TA indicator(s).
- ADI’s TA Score: 2 bullish, 6 bearish.
- KLAC’s TA Score: 3 bullish, 7 bearish.
Price Growth
ADI (@Semiconductors) experienced а -0.09% price change this week, while KLAC (@Electronic Production Equipment) price change was -0.29% for the same time period.
The average weekly price growth across all stocks in the @Semiconductors industry was -0.54%. For the same industry, the average monthly price growth was -14.22%, and the average quarterly price growth was +38.91%.
The average weekly price growth across all stocks in the @Electronic Production Equipment industry was +1.58%. For the same industry, the average monthly price growth was -15.01%, and the average quarterly price growth was +50.27%.
Reported Earning Dates
ADI is expected to report earnings on Aug 26, 2026.
KLAC is expected to report earnings on Jul 28, 2026.
Industries' Descriptions
@Semiconductors (-0.54% weekly)The semiconductor industry manufacturers all chip-related products, including research and development. These chips are used in innumerable electronic devices, including computers, cell phones, smartphones, and GPSs. Intel Corporation, NVIDIA Corp., and Broadcomm are some of the prominent players in this industry. Semiconductor companies usually tend to do well during periods of healthy economic growth, thereby inducing further research and development in the industry – which in turn augurs well for productivity and growth in the economy. In the near future, demand for semiconductor products (and possibly innovation within the segment) should only expand further, with the proliferation of 5G, autonomous vehicles, IoT, and various AI-driven electronics set to herald a new, advanced chapter in the technology-driven world as we know it. With burgeoning prospects comes great competition. In 2015, SIA estimated that U.S. semiconductor industry ranks as the second most competitive U.S. industry out of 2882 U.S. industries designated manufacturers by the U.S. Census Bureau.
@Electronic Production Equipment (+1.58% weekly)The electronic production equipment industry makes equipment used to produce semiconductors. Such equipment includes wafer fabrication, plasma etching and photo-resist processing equipment. The industry also makes chemical vapor deposition processing systems and photomasks, which are high-purity quartz plates that contain patterns to define integrated circuits layouts. Applied Materials, Inc., Lam Research Corporation, and KLA-Tencor Corporation are examples of electronic production equipment manufacturing companies.
| ADI | KLAC | ADI / KLAC | |
| Capitalization | 185B | 286B | 65% |
| EBITDA | 6.23B | 6.06B | 103% |
| Gain YTD | 41.016 | 84.973 | 48% |
| P/E Ratio | 56.58 | 61.95 | 91% |
| Revenue | 12.7B | 13.1B | 97% |
| Total Cash | 3.44B | 613M | 561% |
| Total Debt | 8.69B | 6.15B | 141% |
ADI | KLAC | ||
|---|---|---|---|
OUTLOOK RATING 1..100 | 62 | 67 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 57 Fair valued | 90 Overvalued | |
PROFIT vs RISK RATING 1..100 | 11 | 21 | |
SMR RATING 1..100 | 73 | 13 | |
PRICE GROWTH RATING 1..100 | 47 | 38 | |
P/E GROWTH RATING 1..100 | 58 | 10 | |
SEASONALITY SCORE 1..100 | 50 | 50 |
Tickeron ratings are formulated such that a rating of 1 designates the most successful stocks in a given industry, while a rating of 100 points to the least successful stocks for that industry.
ADI's Valuation (57) in the Semiconductors industry is somewhat better than the same rating for KLAC (90) in the Electronic Production Equipment industry. This means that ADI’s stock grew somewhat faster than KLAC’s over the last 12 months.
ADI's Profit vs Risk Rating (11) in the Semiconductors industry is in the same range as KLAC (21) in the Electronic Production Equipment industry. This means that ADI’s stock grew similarly to KLAC’s over the last 12 months.
KLAC's SMR Rating (13) in the Electronic Production Equipment industry is somewhat better than the same rating for ADI (73) in the Semiconductors industry. This means that KLAC’s stock grew somewhat faster than ADI’s over the last 12 months.
KLAC's Price Growth Rating (38) in the Electronic Production Equipment industry is in the same range as ADI (47) in the Semiconductors industry. This means that KLAC’s stock grew similarly to ADI’s over the last 12 months.
KLAC's P/E Growth Rating (10) in the Electronic Production Equipment industry is somewhat better than the same rating for ADI (58) in the Semiconductors industry. This means that KLAC’s stock grew somewhat faster than ADI’s over the last 12 months.
| ADI | KLAC | |
|---|---|---|
| RSI ODDS (%) | N/A | 2 days ago 74% |
| Stochastic ODDS (%) | 2 days ago 63% | 2 days ago 83% |
| Momentum ODDS (%) | 2 days ago 61% | 2 days ago 72% |
| MACD ODDS (%) | 2 days ago 52% | 2 days ago 63% |
| TrendWeek ODDS (%) | 2 days ago 59% | 2 days ago 61% |
| TrendMonth ODDS (%) | 2 days ago 62% | 2 days ago 66% |
| Advances ODDS (%) | 3 days ago 63% | 15 days ago 78% |
| Declines ODDS (%) | 5 days ago 54% | 5 days ago 57% |
| BollingerBands ODDS (%) | N/A | 2 days ago 64% |
| Aroon ODDS (%) | 2 days ago 66% | 2 days ago 84% |
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ADI and
Correlation & Price change
A.I.dvisor indicates that over the last year, ADI has been closely correlated with MCHP. These tickers have moved in lockstep 79% of the time. This A.I.-generated data suggests there is a high statistical probability that if ADI jumps, then MCHP could also see price increases.
| Ticker / NAME | Correlation To ADI | 1D Price Change % | ||
|---|---|---|---|---|
| ADI | 100% | -1.69% | ||
| MCHP - ADI | 79% Closely correlated | -4.32% | ||
| LRCX - ADI | 79% Closely correlated | +0.15% | ||
| KLAC - ADI | 79% Closely correlated | +1.88% | ||
| MCHPP - ADI | 78% Closely correlated | -4.03% | ||
| ENTG - ADI | 78% Closely correlated | -1.59% | ||
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KLAC and
Correlation & Price change
A.I.dvisor indicates that over the last year, KLAC has been closely correlated with LRCX. These tickers have moved in lockstep 88% of the time. This A.I.-generated data suggests there is a high statistical probability that if KLAC jumps, then LRCX could also see price increases.
| Ticker / NAME | Correlation To KLAC | 1D Price Change % | ||
|---|---|---|---|---|
| KLAC | 100% | +1.88% | ||
| LRCX - KLAC | 88% Closely correlated | +0.15% | ||
| AMAT - KLAC | 87% Closely correlated | +1.60% | ||
| NVMI - KLAC | 83% Closely correlated | +0.21% | ||
| ASML - KLAC | 80% Closely correlated | +0.06% | ||
| ADI - KLAC | 79% Closely correlated | -1.69% | ||
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