Today’s chart shows the power of betting on trends “under the radar”…
Semiconductor chips are critical to the smartphones and other small electronics that fly off shelves today. But shares of individual semiconductor firms can be volatile… That’s why we love “picks and shovels” companies that supply an entire sector.
Take a look at today’s example…
KLA (KLAC) sells quality-control products to chipmakers.
Only one company made up more than 10% of KLA’s sales last fiscal year.
And serving many businesses helps shield this company from its customers’ ups and downs.
Its biggest customer, Taiwan Semiconductor Manufacturing (TSM), saw roughly flat sales in the most recent quarter… while in the same period, KLA’s revenues jumped 18%.
We see the same picture in KLA’s share price. Some semiconductor manufacturers are up over the past year, and some are down – while KLAC rose more than 25%. That’s the power of companies that can sell their “picks and shovels” to whoever is digging for gold…
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Source: Daily Wealth’s Market Notes