Top 5 Stocks That Will Ride the Data Center Chip Equipment Supercycle
📈 Jim Cramer described the current data center chip equipment environment as "the greatest time in the history of the industry."
🚀 Applied Materials (AMAT) has surged 75% year-to-date due to AI-driven shortages across every node and fab.
⏳ Waiting for a pullback in this sector is considered the most expensive trade of 2026 by analysts.
🔍 Onto Innovation (ONTO) sells metrology tools that verify micro-bumps on high-bandwidth memory stacks for NVIDIA Blackwell GPUs.
💰 Onto Innovation recorded Q4 2025 revenue of $266.87 million and holds a cash pile of $639.6 million, up over 200% year-over-year.
🤝 Onto has signed a volume purchase agreement worth more than $240 million with a leading HBM manufacturer running through 2027.
⚙️ Lam Research (LRCX) dominates the etch and deposition steps required to build vertical 3D NAND and DRAM structures for HBM.
📊 Lam Research delivered March quarter revenue of $5.84 billion, up 23.76% year-over-year, with non-GAAP EPS beating consensus.
🚀 Lam Research guidance for the June quarter calls for roughly $6.60 billion in revenue, indicating sequential acceleration.
🎯 Applied Materials (AMAT) touches more steps in chip fabrication than any other equipment vendor on Earth.
📈 AMAT raised its calendar 2026 semiconductor equipment growth outlook from over 20% to more than 30%.
💬 CEO Gary Dickerson stated that customers are "nowhere near able to meet the demand" even after doubling operational capacity.
🏆 Applied Materials stock is up 180% over the past year following strong Q2 FY2026 earnings of $7.91 billion.
🛡️ KLA (KLAC) holds a near-monopoly in semiconductor process control, with roughly 90% of revenue coming from this segment.
💰 KLA approved its 17th consecutive annual dividend increase alongside an additional $7 billion buyback authorization.
🌍 ASML (ASML) is the only company on Earth that makes EUV and High NA EUV lithography systems for leading-edge chips.
📈 ASML Q1 2026 revenue reached $10.34 billion with a gross margin of 53.0%.
🔮 ASML raised its full-year outlook to €36 billion to €40 billion, targeting €44 billion to €60 billion by 2030.
📦 ASML's year-end backlog already sits at $45.06 billion as demand for chips outpaces supply.
- Applied Materials stock has surged 75% year to date as AI data center buildouts trigger shortages across every node and fab.
- Onto Innovation recorded record Q4 2025 revenue of $266.87 million and secured a volume purchase agreement worth over $240 million with a leading HBM manufacturer running through 2027.
- Onto Innovation's cash pile reached $639.6 million, representing an increase of over 200% year over year, providing dry powder for future acquisitions.
- Lam Research delivered March quarter revenue of $5.84 billion, up 23.76% year over year, with non-GAAP EPS of $1.47 beating the $1.36 consensus for the fourth straight earnings beat.
- Lam Research guidance for the June quarter calls for roughly $6.60 billion in revenue, indicating sequential acceleration even at a cyclical peak.
- Applied Materials raised its calendar 2026 semiconductor equipment growth outlook from over 20% to more than 30%, with CEO Gary Dickerson stating demand cannot be met despite doubling operational capacity.
- Applied Materials stock is up 180% over the past year following a Q2 FY2026 report showing revenue of $7.91 billion, up 11.4% year over year.
- KLA delivered March quarter revenue of $3.42 billion with non-GAAP EPS of $9.40 beating the $9.15 consensus and approved a 17th consecutive annual dividend increase alongside an additional $7 billion buyback authorization.
- ASML raised its full-year outlook to €36 billion to €40 billion after Q1 2026 revenue of $10.34 billion at a 53.0% gross margin.
- ASML's 2030 model targets €44 billion to €60 billion in revenue with gross margins expanding to 56% to 60%, supported by a year-end backlog already sitting at $45.06 billion.
- The article explicitly states that 'waiting for a pullback has been the most expensive trade of 2026', implying significant downside risk if the current rally reverses.
- Applied Materials CEO Gary Dickerson admitted that even after doubling operational capacity, the company is 'nowhere near able to meet the demand', highlighting severe supply constraints and potential delivery delays.
- Management raised Applied Materials' growth outlook from over 20% to more than 30%, which may be unsustainable given the already doubled capacity and intense competition for orders.
- ASML's backlog of $45.06 billion represents a massive concentration risk, as any disruption in their single-source EUV/High NA supply chain would halt production for all leading-edge chips globally.
- The article notes that Onto Innovation is still 'underweight' despite record revenue and a major contract, suggesting the market may be undervaluing it but also risks of being priced incorrectly if growth slows.
- KLA's reliance on a single segment (semiconductor process control) accounting for roughly 90% of revenue creates significant concentration risk if that specific market faces headwinds.
- The 'supercycle' narrative relies entirely on continued AI investment, making these stocks highly vulnerable to any shift in macroeconomic conditions or reduced AI spending.
- ASML's long-term targets of €44 billion to €60 billion revenue by 2030 assume sustained demand outpacing supply, which could be challenged by geopolitical tensions or technological breakthroughs elsewhere.