We recently published a list of Goldman Sachs Tech Stocks: 10 Stocks to Buy. In this article, we are going to take a look at where KLA Corporation (NASDAQ:KLAC) stands against other top Goldman Sachs tech stocks to buy.
The technology sector delivered a strong performance in 2024, driven by chip companies, which played a pivotal role in supporting artificial intelligence (AI) infrastructure. Despite a slowdown in the second half of the year due to concerns over high valuations and the AI development timeline, technology remained one of the best-performing sectors as of mid-December. According to Goldman Sachs Research, as of September 2024, U.S. technology stocks have not entered a financial bubble, despite their rapid ascent fueled by AI enthusiasm. Instead, their growth has been underpinned by strong financial fundamentals, with the global tech sector’s earnings per share rising by approximately 400% since the Great Financial Crisis, far outpacing the broader market.
However, 2025 has presented new challenges for tech stocks. As of March 5, the Information Technology and Communication Services sectors declined by 4.42%, weighing down the broader index. Market volatility has particularly impacted the “Magnificent Seven” tech giants, which collectively lost approximately $2.7 trillion in market value over 50 days. On March 18th, Reuters reported that major U.S. indices, experienced further declines due to economic uncertainties and Federal Reserve policy expectations, reinforcing concerns about tech sector stability.
Despite short-term headwinds, the broader technology outlook remains positive. Deloitte’s 2025 Technology Industry Outlook projects a 9.3% increase in global IT spending, with data center and software segments anticipated to achieve double-digit growth. AI spending is expected to expand at a compound annual growth rate of 29% through 2028, indicating strong long-term demand. A 2024 Morgan Stanley analysis further suggests that hedge funds have increasingly added long positions in technology, media, and telecom (TMT) stocks, particularly in the semiconductor and software sectors, reflecting continued institutional confidence.
While AI-driven investments initially centered on data center infrastructure, Goldman Sachs analysts predict a shift toward software companies as AI monetization matures. The focus is expected to transition from AI model training to inferencing, where applications generate revenue, leading to further software sector expansion. Despite emerging AI competitors such as DeepSeek, major cloud computing and tech firms are ramping up AI-related capital expenditures in pursuit of artificial general intelligence (AGI).
Nevertheless, investors should prepare for further market volatility. Reuters reports that hedge funds exited U.S. tech and media stocks at the fastest pace in six months by February 21, reflecting shifting institutional strategies. Warren Buffett’s Berkshire Hathaway’s portfolio adjustments indicate a slight underweighting of technology stocks.
As the technology sector navigates both structural growth opportunities and near-term market turbulence, investors must weigh AI-driven innovation against macroeconomic risks. Goldman Sachs has identified key tech stocks poised for future growth, offering strategic opportunities in an evolving landscape. This article will examine 10 Goldman Sachs tech stocks that present compelling investment cases in 2025.
Our Methodology
To develop our list of Goldman Sachs Tech Stocks: 10 Stocks to Buy, we ranked the top current holdings of the Goldman Sachs US Technology Opportunities Equity Portfolio according to the highest number of hedge funds ownerships. We have used Insider Monkey’s exclusive proprietary Q4 2024 database of hedge funds to arrive at our rankings.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
KLA Corporation (KLAC): among the 10 Goldman Sachs Tech Stocks to Buy?
The inner workings of a semiconductor manufacturing facility, neon hued machines humming with activity.
KLA Corporation (NASDAQ:KLAC) is a leading provider of process control and yield management solutions for the semiconductor and related nanoelectronics industries. The company specializes in developing advanced inspection tools, metrology systems, and computational analytics, essential for manufacturing wafers, reticles, integrated circuits, packaging, and printed circuit boards.
KLA Corporation (NASDAQ:KLAC) continues to deliver strong financial performance, reporting Q2 FY25 revenue of $3.08 billion, hitting the upper end of guidance. GAAP EPS came in at $6.16, while non-GAAP EPS surged to $8.20, reflecting five consecutive quarters of accelerating earnings growth. The company’s revenue trajectory has also improved, from a 3% decline a year ago to 24% growth last quarter.
KLA Corporation (NASDAQ:KLAC)’s advanced semiconductor process control solutions are integral to AI chipmakers like Nvidia and Broadcom. Despite a 6.41% year-over-year revenue dip, quarterly revenue rose 8.34%, with 41.5% YoY earnings growth. Short interest increased by 17.13% month-over-month to 3.35 million shares (2.53% of float), indicating heightened market attention.
KLA Corporation (NASDAQ:KLAC) closed at $719.61 on March 19, 2025, up 1.35% for the day, outperforming the broader market. Over five years, shares have returned over 500%. Analysts remain bullish, with 60% out of 30 analysts tracking the stock, issuing Buy ratings. With a strong earnings outlook, KLA Corporation remains a key player in semiconductor equipment, benefiting from AI-driven industry tailwinds.
Overall KLAC ranks 10th on our list of Goldman Sachs tech stocks: 10 stocks to buy. While we acknowledge the potential for KLAC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than KLAC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
