In short: Subscriber view, passing: one of the upstream "sell the knives" equipment suppliers (with ASML, Lam, Applied) that win whoever wins the AI knife fight.
13:22In this knife fight, you want to be the one selling the knives. Upstream semiconductor suppliers such as ASML, KLA, LAM Research, and Applied Materials, together with memory suppliers such as Micron and SK Hynix. They benefit regardless of whether the winner is Nvidia, a hyperscaler, an AI lab, or some architecture we haven't seen yet.
In short: Rob Sechan's final trade, and it is a drawdown argument rather than a momentum one: "KLA, still off 30% since the June peak." That single sentence is the whole pitch — the semiconductor process-control name has not participated in the Mag-7 recovery he spent the hour describing, which is consistent with his stated preference throughout: he is a buyer into weakness, not into strength.
KLA makes the inspection equipment that finds defects on semiconductor wafers during manufacture — a picks-and-shovels business inside the chip industry rather than a chip designer.
Sechan's whole pitch is that it is still 30% below its June high. That is a deliberate contrast with everything else discussed in the hour: the Mag 7 names have recovered and he says he would rather buy weakness than strength. This is him doing exactly that — reaching for the part of the semiconductor complex that has not participated.
In short: Rob Sechan's final trade — the semiconductor process-control name as his pick.
In short: 2027 gets bigger. Q4 revenue (June quarter) +15% Y/Y to a record $3.7B ($60M beat) and adjusted EPS $1.05 (beat by $0.05) — per-share figures reflect the June 11 10-for-1 split, so they aren't comparable to prior quarters at face value. A clean beat-and-raise, but the stock sold off after a pre-earnings run. KLA lifted its 2026 wafer-equipment market view (including advanced packaging) to the low $150B range from "$140 billion plus" last quarter; CEO Rick Wallace said AI demand signals have strengthened materially since March and carried his 2027 conviction further across logic, DRAM, HBM, NAND and packaging. Advanced-packaging process-control revenue was raised again to ~$1.1B in 2026, up more than 70% Y/Y. The catch: memory pricing is a ~100-basis-point drag on gross margin that CFO Bren Higgins said likely continues through 2027, because KLA can't reprice orders already taken. Q1 FY27 guide ~$4.0B (vs ~$3.9B) and EPS ~$1.16 (vs ~$1.13), with second-half growth around 20% over the first half. Watch whether gross margin holds 62.5% as volume ramps. (Recap, not a stance call.)
KLA makes the inspection equipment that finds defects on chips during manufacturing — a small slice of the industry's spending, but one that grows when chips get harder to make, which AI chips certainly are. Its most useful disclosure is its estimate of what the whole industry will spend on equipment: it just raised that for 2026 to about $150 billion, from "$140 billion plus" three months ago, and said AI demand signals have strengthened materially since March. A caveat worth understanding: KLA buys memory chips for its own tools, those prices are rising, and it cannot reprice orders customers already placed — so roughly a 1% margin drag is locked in until 2027. The question is whether serving a bigger market comes at a structurally lower margin. Note the split figures reflect a ten-for-one stock split in June, so per-share numbers aren't comparable to older ones. A recap, not a call.
In short: Semi-equipment working off the 52-week-high list, and explicitly named a "derivative off memory" (with Lam and Applied) — own the toolmakers as the memory cycle extends.
KLA makes the equipment that inspects chips for defects during manufacturing. Terranova names it alongside Lam and Applied Materials as a "derivative off memory" — a supplier that profits whenever memory makers expand. It's also one of his technology names on the 52-week-high list, so the price action already confirms it's a leader, not a hope.
In short: The process-control / inspection specialist — monitors wafers for defects while they run. The "quote-unquote worst" of his three semicap names lately, but still up ~100% year-over-year; the whole group works.
KLA dominates "process control" — the inspection and measurement machines that watch wafers as they're built, hunting for microscopic defects before a chip is ruined. The smaller the features get, the more inspection matters, so KLA is a toll-taker on advancing complexity.
It's been the "worst" of Rasgon's three equipment stocks lately — which still means up roughly 100% year over year. The group rises together; KLA just rose slightly less.
46:09ASAT has a process control business. There's smaller companies like Onto and Nova and others. — So, which of these is doing the best? — Well, they're all doing good. And and so this is the thing with semicap the correlations are pretty high. And as I say, like if if if it's working, they will all work to greater or lesser degree.
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