Top 5 Stocks That Will Ride the Data Center Chip Equipment Supercycle
Top 5 Stocks That Will Ride the Data Center Chip Equipment Supercycle
Jeremy PhillipsSat, May 30, 2026 at 10:55 AM UTC
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Jim Cramer called it "the greatest time in the history of the industry" on Mad Money Thursday night, and the data is screaming the same thing: Applied Materials (NASDAQ:AMAT) is up 75% year to date as the AI data center buildout has triggered shortages across every node, every fab, and every piece of capital equipment that touches a wafer. The five names below are the toll collectors of that buildout, and waiting for a pullback has been the most expensive trade of 2026.
1. Onto Innovation: The Metrology Sleeper Nobody Is Pricing Right
Start with the name nobody at your office mentions. Onto Innovation (NYSE:ONTO) sells the metrology and inspection tools that verify every micro-bump on a high-bandwidth memory stack. Every HBM cube glued onto an NVIDIA Blackwell GPU passes through Onto's Dragonfly platform before it ships. That is the chokepoint of AI accelerator packaging, and it is the part of the supply chain analysts still underweight.
Q4 2025 was a record at $266.87 million in revenue, but the real catalyst is the volume purchase agreement worth more than $240 million with a leading HBM manufacturer running through 2027. CEO Mike Plisinski said "global AI investment fueling a robust upcycle in semiconductor capital equipment spending" reinforces confidence in outgrowing the broader equipment market in 2026 and beyond, and a cash pile of $639.6 million, up over 200% year over year, gives them dry powder for the next bolt-on.
Onto is up 64% YTD and still carries a roughly $13 billion market cap. That is a rounding error next to the next name on the list, which actually builds the machines carving the trenches Onto inspects.
2. Lam Research: The Etch and Deposition Cash Machine
If HBM is the AI memory of choice, Lam Research (NASDAQ:LRCX) is the company physically stacking it. Lam dominates etch and deposition, the two process steps that build the vertical 3D NAND and DRAM structures HBM requires. Every fresh HBM3E and HBM4 capacity announcement from SK hynix, Micron, or Samsung translates into Lam orders.
The March quarter delivered revenue of $5.84 billion, up 23.76% year over year, with non-GAAP EPS of $1.47 beating the $1.36 consensus, the fourth straight earnings beat. Guidance for the June quarter calls for roughly $6.60 billion in revenue, a sequential acceleration that does not happen at a cyclical peak. CEO Tim Archer said "AI-driven demand reshapes the semiconductor industry", and the 86% YTD move says the market believes him.
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Lam is the obvious memory torque trade. The next stock is even more obvious, and it is the one Cramer is pounding the table on.
3. Applied Materials: Cramer's Stock and Dickerson's Victory Lap
This is the one. AMAT touches more steps in chip fabrication than any other equipment vendor on Earth, and on Mad Money Thursday CEO Gary Dickerson sat across from Cramer and told him "AI is driving incredible computing demand" and "token demand is up like 3x in the last few months". Cramer noted Dickerson had returned 2,897% for shareholders over his tenure. That is the kind of compounding that happens once a career.
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The Q2 FY2026 report backed every word: revenue of $7.91 billion, up 11.4% year over year, non-GAAP EPS of $2.86 against a $2.66 consensus, and management raising its calendar 2026 semiconductor equipment growth outlook from over 20% to more than 30%. Dickerson told Cramer "you're nowhere near able to meet the demand" even after doubling operational capacity. I have been watching Applied for the better part of a decade, and I have never seen a CEO speak with this much forward visibility on the order book.
The stock is up 180% over the past year. The next name has even fatter margins and arguably an even better moat.
4. KLA: The Toll Collector With Software Margins
KLA (NASDAQ:KLAC) owns process control. Roughly 90% of revenue comes from one segment, semiconductor process control, where KLA holds a near-monopoly share. Every wafer at every leading-edge fab gets inspected with a KLA tool. It is the unkillable subscription of semiconductor capex, and the margins prove it.
The March quarter delivered revenue of $3.42 billion with non-GAAP EPS of $9.40 beating the $9.15 consensus, and June quarter guidance calls for non-GAAP gross margin of roughly 62%. Management approved the 17th consecutive annual dividend increase alongside an additional $7 billion buyback authorization. CEO Rick Wallace said KLA is "a key enabler of the AI ecosystem" across foundry/logic, memory, advanced packaging, and services.
KLA is up 59% YTD and trades like a software company because it operates like one. But there is one name that sits a level above even KLA, and without it, none of the supercycle exists.
5. ASML: The Gatekeeper of the Entire Supercycle
ASML (NASDAQ:ASML) is the only company on Earth that makes EUV and High NA EUV lithography systems. Every 3nm and 2nm logic chip, every leading-edge HBM die, every NVIDIA, AMD, and Broadcom AI accelerator currently shipping passes through an ASML machine. There is no second source. There is no workaround. If TSMC, Samsung, or Intel wants to build a leading-edge fab, they fly to Veldhoven and get in line.
Q1 2026 delivered revenue of $10.34 billion at a 53.0% gross margin, and management raised the full-year outlook to €36 billion to €40 billion. The 2030 model targets €44 billion to €60 billion in revenue at 56% to 60% gross margin, and the year-end backlog already sits at $45.06 billion. CEO Christophe Fouquet said "demand for chips is outpacing supply" and customers are accelerating capacity expansion plans backed by long-term agreements with their own customers.
ASML is up 51% YTD. It is the single most important industrial company in the world, and the market is just starting to price it that way.
The Setup
Onto inspects what Lam etches, Applied deposits, KLA measures, and ASML patterns. Every link in that chain is sold out into 2027. Dickerson told Cramer "this inflection is going to go on for a very long time". The longer you wait for a clean entry, the more YTD moves like AMAT's 75% you will be paying up for.
The analyst who called NVIDIA in 2010 just named his top 10 AI stocks
This analyst's 2025 picks are up 106% on average. He just named his top 10 stocks to buy in 2026. Get them here FREE.
Source: “AOL Money”
