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KLAC vs TSM
Which Stock Would AI Choose? KLA Corporation (KLAC) vs. Taiwan Semiconductor Manufacturing (TSM) Stock Comparison
Key Takeaways
- Different layers of the same AI boom: KLAC supplies process-control and yield-management equipment, while TSM manufactures the chips themselves.
- Both report record results: KLAC posted record quarterly revenue of $3.66 billion, and TSM reported record quarterly revenue near NT$1.49 trillion (about $46.7 billion), up roughly 50% year over year.
- Relative valuation differs sharply: TSM trades at a materially lower forward earnings multiple than KLAC, reflecting different growth and capital-intensity profiles.
- Momentum favors TSM: TSM recently set a fresh all-time high, while KLAC remains below its 52-week peak despite strong year-to-date gains.
- Risk profiles diverge: TSM carries geographic and capital-expenditure concentration risk, while KLAC is more sensitive to chipmakers' equipment spending cycles.
Introduction
KLA Corporation and Taiwan Semiconductor Manufacturing Company are two of the most consequential names in the semiconductor supply chain, yet they play very different roles. KLAC provides the inspection, metrology, and process-control tools that help foundries maximize yields, while TSM is the world's largest contract chipmaker, fabricating the advanced processors behind artificial intelligence (AI) systems. This stock comparison is relevant for investors seeking to understand relative performance and market positioning within the semiconductor sector, whether they favor the "picks and shovels" equipment layer or the dominant manufacturing bottleneck at the center of the AI buildout.
KLAC Overview and Recent Performance
KLA Corporation is the leading global supplier of process-control and yield-management systems for semiconductor manufacturing, serving customers that include TSMC, Samsung, and Intel. Its tools detect defects and measure features during production, a function that grows more valuable as chips become more complex and expensive to fabricate. In recent weeks, KLAC has traded in the high $190s to low $200s after recovering from a sharp sell-off earlier in the year following its earnings release. The stock remains well above its 50-day and 200-day moving averages but still below its 52-week high of roughly $307, indicating an uptrend that has not fully reclaimed prior peaks. Sentiment has been shaped by record June-quarter revenue of $3.66 billion, up about 15% year over year, and management's expectation that growth will accelerate in the second half of the calendar year. A key catalyst has been advanced packaging: KLA now expects its advanced-packaging process-control revenue to reach about $1.1 billion in calendar 2026, growth of more than 70%. The company also completed a 10-for-1 stock split in June 2026. Analysts remain broadly constructive, with a consensus "Buy" rating, though Morgan Stanley recently trimmed its price target from $253 to $227 while keeping an Overweight rating.
TSM Overview and Recent Performance
Taiwan Semiconductor Manufacturing Company is the world's largest dedicated semiconductor foundry, holding roughly 72.5% of the global foundry market according to TrendForce. It fabricates chips designed by companies such as Nvidia, AMD, Apple, and Broadcom, making it the manufacturing layer that much of the AI ecosystem depends upon. In recent weeks, TSM has been a standout performer, reaching a record high near $487 before easing back to the mid-$450s as investors digested results. The stock is up more than 30% year to date, sharply outperforming the broader technology sector. The dominant catalyst has been demand for AI and high-performance computing (HPC) chips, which now account for the majority of revenue. TSM posted record third-quarter revenue of about NT$1.49 trillion (approximately $46.7 billion), up roughly 50% year over year and above guidance, driven by leading-edge process demand and a fast ramp of its 2-nanometer (N2) technology. Gross margin has stayed near historically elevated levels, and the company announced a multi-year, roughly $2 billion supply agreement with GlobalFoundries to expand silicon-interposer capacity for advanced packaging. Analysts remain overwhelmingly positive, with the large majority rating the stock a Buy.
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Head-to-Head Comparison
The two companies occupy adjacent but distinct positions in the semiconductor value chain, which drives key differences in growth, margins, and risk. TSM is a capital-intensive manufacturer scaling advanced nodes and packaging; its growth is tied directly to end demand for AI accelerators and leading-edge logic, but it carries substantial capital expenditure (capex) commitments and geographic concentration risk in Taiwan. KLAC is a higher-margin equipment and services business whose revenue depends on chipmakers' willingness to invest in new capacity and yield improvement, making it more cyclical and sensitive to swings in wafer fab equipment (WFE) spending. On valuation, TSM trades at a notably lower forward earnings multiple—around 20 times forward earnings—while KLAC trades at a forward multiple in the mid-30s, reflecting its exceptionally high profitability and strong return on invested capital. In terms of recent momentum, TSM has set fresh record highs, whereas KLAC is still retracing toward its prior peak. Sentiment for both is positive, but the market is pricing TSM for continued earnings growth at a lower multiple, while KLAC carries a premium tied to its margin profile and leverage to the packaging and leading-edge buildout.
Tickeron AI Verdict
Based on observable factors, Tickeron's AI would likely lean toward TSM in the current environment. The stock's trend consistency is stronger, supported by a fresh record high, sustained revenue growth above 50%, and dominant market share in an industry with limited viable alternatives. TSM also presents a more favorable valuation on a forward earnings basis and benefits from a clear, durable catalyst in AI and high-performance computing demand. KLAC remains a high-quality, highly profitable business with accelerating packaging revenue, but its momentum is comparatively less established and its valuation more demanding. The AI's preference is probabilistic rather than definitive, reflecting trend strength, relative positioning, and catalyst visibility rather than a prediction of future returns.
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 KLAC is a Hold and TSM is a Hold.
Momentum Indicator for KLAC turns negative, indicating new downward trend
KLAC saw its Momentum Indicator move below the 0 level on October 13, 2026. This is an indication that the stock could be shifting in to a new downward move. Traders may want to consider selling the stock or exploring put options. Tickeron's A.I.dvisor looked at 100 similar instances where the indicator turned negative. In 73 of the 100 cases, the stock moved further down in the following days. The odds of a decline are at 73%.
Technical Analysis (Indicators)
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 37 of the 55 cases, the stock moved lower in the following days. This puts the odds of a move lower at 67%.
The Moving Average Convergence Divergence Histogram (MACD) for KLAC turned negative on October 13, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 48 similar instances when the indicator turned negative. In 27 of the 48 cases the stock turned lower in the days that followed. This puts the odds of success at 56%.
KLAC moved below its 50-day moving average on October 13, 2026 date and that indicates a change from an upward trend to a downward trend.
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.
Bullish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 1 day, which means it's wise to expect a price bounce in the near future.
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 11 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 73%.
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%.
KLAC may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call 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 40 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 68, placing this stock slightly better than average.
The Tickeron Price Growth Rating for this company is 42 (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 Seasonality Score of 85 (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.
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).
Momentum Indicator for TSM turns negative, indicating new downward trend
TSM saw its Momentum Indicator move below the 0 level on October 12, 2026. This is an indication that the stock could be shifting in to a new downward move. Traders may want to consider selling the stock or exploring put options. Tickeron's A.I.dvisor looked at 84 similar instances where the indicator turned negative. In 61 of the 84 cases, the stock moved further down in the following days. The odds of a decline are at 73%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The 10-day RSI Indicator for TSM moved out of overbought territory on October 07, 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 52 similar instances where the indicator moved out of overbought territory. In 31 of the 52 cases, the stock moved lower in the following days. This puts the odds of a move lower at 60%.
The Moving Average Convergence Divergence Histogram (MACD) for TSM turned negative on October 09, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 46 similar instances when the indicator turned negative. In 29 of the 46 cases the stock turned lower in the days that followed. This puts the odds of success at 63%.
TSM moved below its 50-day moving average on October 14, 2026 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where TSM 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 62%.
TSM broke above its upper Bollinger Band on October 05, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Bullish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 2 days, which means it's wise to expect a price bounce in the near future.
Following a +5.79% 3-day Advance, the price is estimated to grow further. Considering data from situations where TSM advanced for three days, in 234 of 315 cases, the price rose further within the following month. The odds of a continued upward trend are 74%.
The Aroon Indicator entered an Uptrend today. In 214 of 276 cases where TSM Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 78%.
Fundamental Analysis (Ratings)
The Tickeron Profit vs. Risk Rating rating for this company is 8 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 75, placing this stock better than average.
The Tickeron SMR rating for this company is 26 (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 PE Growth Rating for this company is 29 (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 Price Growth Rating for this company is 40 (best 1 - 100 worst), indicating steady price growth. TSM’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued 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.
The Tickeron Valuation Rating of 64 (best 1 - 100 worst) indicates that the company is fair valued 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: P/B Ratio (11.614) is normal, around the industry mean (7.975). P/E Ratio (33.701) is within average values for comparable stocks, (165.532). Projected Growth (PEG Ratio) (0.859) is also within normal values, averaging (3.761). Dividend Yield (0.008) settles around the average of (0.007) among similar stocks. P/S Ratio (15.480) is also within normal values, averaging (45.794).
KLAC | TSM | ||
|---|---|---|---|
OUTLOOK RATING 1..100 | 85 | 85 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 88 Overvalued | 64 Fair valued | |
PROFIT vs RISK RATING 1..100 | 40 | 8 | |
SMR RATING 1..100 | 15 | 26 | |
PRICE GROWTH RATING 1..100 | 42 | 40 | |
P/E GROWTH RATING 1..100 | 13 | 29 | |
SEASONALITY SCORE 1..100 | 85 | 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.
TSM's Valuation (64) in the Semiconductors industry is in the same range as KLAC (88) in the Electronic Production Equipment industry. This means that TSM’s stock grew similarly to KLAC’s over the last 12 months.
TSM's Profit vs Risk Rating (8) in the Semiconductors industry is in the same range as KLAC (40) in the Electronic Production Equipment industry. This means that TSM’s stock grew similarly to KLAC’s over the last 12 months.
KLAC's SMR Rating (15) in the Electronic Production Equipment industry is in the same range as TSM (26) in the Semiconductors industry. This means that KLAC’s stock grew similarly to TSM’s over the last 12 months.
TSM's Price Growth Rating (40) in the Semiconductors industry is in the same range as KLAC (42) in the Electronic Production Equipment industry. This means that TSM’s stock grew similarly to KLAC’s over the last 12 months.
KLAC's P/E Growth Rating (13) in the Electronic Production Equipment industry is in the same range as TSM (29) in the Semiconductors industry. This means that KLAC’s stock grew similarly to TSM’s over the last 12 months.
| KLAC | TSM | |
|---|---|---|
| RSI ODDS (%) | 2 days ago 67% | 2 days ago 60% |
| Stochastic ODDS (%) | 2 days ago 86% | 2 days ago 76% |
| Momentum ODDS (%) | 2 days ago 73% | 2 days ago 73% |
| MACD ODDS (%) | 2 days ago 56% | 2 days ago 63% |
| TrendWeek ODDS (%) | 2 days ago 63% | 2 days ago 64% |
| TrendMonth ODDS (%) | 2 days ago 80% | 2 days ago 78% |
| Advances ODDS (%) | 14 days ago 77% | 11 days ago 74% |
| Declines ODDS (%) | 2 days ago 59% | 4 days ago 62% |
| BollingerBands ODDS (%) | 2 days ago 90% | 2 days ago 58% |
| Aroon ODDS (%) | 2 days ago 64% | 2 days ago 78% |
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 overvalued. We use an FA Score to show how many ratings show the ticker to be undervalued (green) or overvalued (red).
KLAC’s FA Score shows that 2 FA rating(s) are green while TSM’s FA Score has 3 green FA rating(s).
- KLAC’s FA Score: 2 green, 3 red.
- TSM’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.
KLAC’s TA Score shows that 4 TA indicator(s) are bullish while TSM’s TA Score has 3 bullish TA indicator(s).
- KLAC’s TA Score: 4 bullish, 6 bearish.
- TSM’s TA Score: 3 bullish, 6 bearish.
Price Growth
KLAC (@Electronic Production Equipment) experienced а -9.16% price change this week, while TSM (@Semiconductors) price change was -8.94% for the same time period.
The average weekly price growth across all stocks in the @Electronic Production Equipment industry was -15.43%. For the same industry, the average monthly price growth was -5.59%, and the average quarterly price growth was -18.80%.
The average weekly price growth across all stocks in the @Semiconductors industry was -12.28%. For the same industry, the average monthly price growth was -4.19%, and the average quarterly price growth was +8.08%.
Reported Earning Dates
KLAC is expected to report earnings on Oct 28, 2026.
TSM is expected to report earnings on Oct 15, 2026.
Industries' Descriptions
@Electronic Production Equipment (-15.43% 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.
@Semiconductors (-12.28% 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.
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