Nvidia Corp.’s (NASDAQ : NVDA ) Q2 results reaffirmed the company’s dominance in AI infrastructure, as adjusted earnings and revenues exceeded expectations. Guidance also indicated that growth would continue above 50%.
Although data center revenues narrowly fell short of expectations, the semiconductor company’s optimistic forecast and comments on spending up to $4.0 billion in AI have far-reaching implications beyond its stock.
What are the two biggest winners? Lam Research (NASDAQ: LRCX) and Milpitas-headquartered KLA Corp (NASDAQ: KLAC).
The fortunes of both US semiconductor manufacturers are closely linked to NVDA’s capital intensity as well as the broader AI chip boom.
What makes Nvidia’s earnings bullish for KLAC?
KLA is a leading provider of process control systems and yield management software. It stands to benefit from Nvidia’s ongoing expansion in AI infrastructure.
AI Darlings’ report highlights a spike in sales of networking components and an 17% increase in Blackwell chips shipments. Both are indicators of more complex chip architectures.
GPUs are becoming more sophisticated, increasing the demand for metrology and defect detection. KLA provides tools essential to ensuring that these high-performance processors meet strict quality standards. This is especially true as foundries move towards smaller nodes, 3D packaging and other innovations.
NVDA’s comment on the up to $ 4 trillion AI infrastructure spend by 2030 indicates a multiple-year cycle for capex across fabs. KLA, which has a strong position in both front-end and rear-end control of processes, could be the direct beneficiary.
Investors can take Nvidia’s performance as an indication of KLA’s growth in the long term, particularly as chipmakers increase production.
KLA’s exposure to memory and advanced logic nodes, which are key components of the AI supply chain, is a must-own.
Lam Research shares benefit from Nvidia’s earnings
Lam Research is a supplier of deposition and etching equipment. Its stock price also closely correlates with Nvidia’s earning trajectory.
Nvidia’s Q2 result showed robust demand, especially for GPUs. Blackwell chips account for 70 percent of the data centre revenue. Lam is a leader in advanced fabrication technologies, such as high-aspect-ratio etching or packaging.
LRCX becomes essential as NVDA customers such as TSMC, Samsung and others ramp up the production of AI chip. These tools enable physical structures which power generative AI workloads.
Nvidia also stated that it expects to generate up to $5 Billion in revenue from H20 chips if the geopolitical environment allows. This potential upwards trend may lead to increased wafer production and demand for packaging, which would directly boost Lam Research’s stock.
NVDA has also announced a $9.7 Billion share buyback and a $60 Billion authorization to repurchase shares this quarter, indicating its belief in long-term profitability. This is reassuring for LRCX suppliers who depend on visibility.
This semiconductor stock is a great alternative for those investors who want to get exposure to AI hardware without having Nvidia’s high valuation. It has strong fundamentals, and it’s deeply integrated into the semiconductor industry.
The post entitled These two semiconductor stocks directly benefit from Nvidia’s blockbuster earnings could be updated as new information unfolds.
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