Gary Dickerson raised AMAT’s 2026 semiconductor equipment growth forecast past 30%, while ONTO locked a $240 million HBM purchase agreement running through 2027.
Teradyne’s Q1 revenue surged 87% to $1.28 billion with roughly 70% tied directly to AI demand, as net income jumped 303%.
Applied Materials (NASDAQ:AMAT) just told the Street its semiconductor equipment business will grow more than 30% in calendar 2026, an upward revision from a prior bar of 20%. That is the sound of an AI fab CapEx supercycle shifting from thesis to invoice, and the picks-and-shovel names selling into every foundry, HBM stack and gate-all-around node are the ones cashing the checks. Five stocks sit directly under that spending fire hose. Here is where the money is moving, in order.
Intel
1. Onto Innovation: The Advanced-Packaging Sleeper
Onto Innovation (NYSE:ONTO) is the name most retail investors still cannot spell, but it sits at the exact chokepoint AI needs: inspection and metrology for HBM stacks, 2.5D logic and gate-all-around devices. When TSMC and SK hynix bolt an accelerator together, Onto’s Dragonfly and Atlas tools decide whether the die passes or scraps. That is process control leverage on the fastest-growing corner of the fab, well beyond commoditized deposition.
The Q1 FY26 earnings report did the talking. Revenue hit a record $291.95 million, up 9.5% year over year, with the advanced nodes business tracking roughly 25% full-year growth. Onto also locked a volume purchase agreement worth more than $240 million with a leading HBM manufacturer running through 2027. CEO Mike Plisinski flagged “the accelerating adoption of our Atlas G6 OCD system for next-generation logic and memory devices” as the tell.
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The stock action agrees. ONTO closed at $321.44 on July 10 after ripping nearly 94% higher year to date and more than 212% over the past year. The analyst target sits at $369.60 with seven of seven analysts at a Buy or Strong Buy rating. The bigger surprise is what a $479 billion incumbent is telling investors about 2026.
2. Applied Materials: The Heavyweight Raising Its Own Bar
Applied Materials is the broadest AI-fab exposure in the group. Deposition, ion implant, CMP, epitaxy, advanced packaging: If a wafer moves, Applied touches it. Gate-all-around transistor transitions and HBM DRAM stacking both pull disproportionate dollars per wafer, and Applied’s Precision Selective Nitride PECVD and Trillium ALD tools were built for exactly that geometry.
Q2 FY26 delivered a fourth straight beat: non-GAAP EPS of $2.86 versus $2.66 expected, revenue of $7.91 billion, up 11.4% year over year, and non-GAAP operating margin expanding to 32.1% from 30.7%. CEO Gary Dickerson bluntly raised the ceiling: “we now expect our semiconductor equipment business to grow more than 30% in calendar 2026.”
Shares reflect the move: AMAT closed at $602.50 on July 10, up 124.09% year to date. Forward P/E of 36 is not cheap, but with 28 Buy ratings against a single Strong Sell, the Street is not blinking. The next name goes narrower and hits harder on memory.
3. Lam Research: Etch, Deposition, and the HBM Stack
Lam Research (NASDAQ:LRCX) owns the etch and deposition tools required to build 3D NAND and stack HBM DRAM dies without wrecking yield. Every incremental HBM3E and HBM4 layer means more Lam content per wafer. That is why the memory recovery narrative and the AI CapEx narrative converge on this ticker.
Q3 FY26 was a record quarter across the board: EPS of $1.47 beat by 7.83%, revenue hit $5.84 billion, up 23.76% year over year, and operating margin expanded to 35.0% from 33.9%. Q4 guidance calls for revenue of roughly $6.60 billion. CEO Tim Archer framed it plainly: “Lam delivered record revenue and EPS in the March quarter as AI-driven demand reshapes the semiconductor industry.”
The stock closed at $350.33 on July 10, up 89.31% year to date and 246.66% over the last year. Analyst target is $357.77 with 29 of 35 analysts at a Buy or Strong Buy rating. Etch and deposition are the volume game. The next stock is the quality game, and it has monopoly economics.
4. KLA: The Process-Control Moat Nobody Can Bypass
KLA Corporation (NASDAQ:KLAC) does one thing better than anyone: tell foundries where the defects are before a wafer becomes a $30,000 doorstop. There is no advanced node, no HBM stack and no CoWoS package being built at scale in 2026 without KLA inspection and metrology on the floor. That is the moat, and it prints margins that look like software.
Q3 FY26 revenue was $3.42 billion, up 11.5% year over year, with the Semi Process Control segment doing $3.08 billion. The kicker is profitability: TTM operating margin of 41.2% and return on equity of 95%. Capital return matched the confidence: a 17th consecutive dividend increase to $2.30 per share and a new $7 billion buyback authorization. CEO Rick Wallace called KLA “a key enabler of the AI ecosystem” across foundry/logic, memory, advanced packaging, and services.
KLAC closed at $231.52 on July 10, up nearly 82% year to date. Solid, though the real punchline is a $56 billion test company whose AI exposure just detonated.
5. Teradyne: The AI Test Kingpin
Teradyne (NASDAQ:TER) tests the chips after everyone else builds them. Every accelerator, every HBM die, every networking ASIC gets validated on Teradyne automatic test equipment before it ships to a hyperscaler. Approximately 70% of Q1 revenue is tied to AI-related demand. There is no other name on this list with that level of direct AI concentration.
Q1 FY26 obliterated estimates. Revenue: $1.28 billion, up 87.04% year over year. Non-GAAP EPS: $2.56 versus $2.11 expected, a 21.15% beat. Non-GAAP operating margin expanded to 37.5% from 20.5% a year prior, and net income surged 303.36% to $398.9 million. CEO Greg Smith made the thesis explicit: “our results reflect the strength of our wafer to AI data center strategy.”
Shares closed at $359.60 on July 10, up 73.25% year to date and 264.63% over the past year. Analyst target is $423.41. Retail has noticed too: Reddit engagement spiked in mid-June with 263 upvotes and 73 comments in a single peak window on r/wallstreetbets. Robotics remains free optionality on top of the test franchise.
The Bottom Line
Applied Materials raised its 2026 growth bar past 30%, KLA green-lit a $7 billion buyback, Lam printed a record quarter, Onto locked HBM into 2027, and Teradyne grew revenue 87%. That is a coordinated capex flood, well beyond a simple rotation, and the equipment vendors are the toll booths. China export controls and tariffs remain the tail risk on all five names, but with hyperscaler capex still climbing and every advanced node needing more process control per wafer, the window for reasonable entry is narrowing quarter by quarter.
