ACLS

Kulicke and Soffa Industries, Inc. KLIC delivered solid third-quarter fiscal 2026 results, reflecting accelerating demand across semiconductor assembly markets. The company is benefiting from AI-led data-center investments, rising adoption of advanced packaging, improving memory demand and a broader recovery in traditional semiconductor applications.KLIC reported non-GAAP earnings of $1.20 per share, beating the Zacks Consensus Estimate of $1 by 20%. Revenues surged 122.6% year over year to $330.4 million and surpassed the consensus mark by 6.6%. Revenues also increased 36.2% sequentially. The strong quarterly performance, along with improving order visibility, indicates that multiple growth engines could support Kulicke and Soffa beyond the current semiconductor recovery. Rapid expansion of AI infrastructure remains one of the most important catalysts for Kulicke and Soffa. Growing AI workloads require increasingly sophisticated logic, memory, networking, storage and power-management semiconductors, generating demand for both advanced packaging and established wire-bonding technologies.Data centers require substantial volumes of chips assembled with conventional wire bonding for networking, communications, storage and power-management applications. Management noted that AI-driven data-center expansion is increasing requirements for its thermal-compression and wire-bonding solutions. This allows KLIC to benefit from AI infrastructure spending through both its newer advanced solutions and its large installed base of traditional bonding equipment.The strength was evident in the General Semiconductor business, where revenues surged 52.6% sequentially to $227.2 million in the fiscal third quarter. Although AI and data centers remain major catalysts, management is also witnessing a broader recovery in traditional semiconductor markets, which should diversify the company's growth trajectory. Increasing semiconductor complexity represents another major opportunity. High-performance logic and memory devices are increasingly adopting heterogeneous integration architectures that combine multiple dies and technologies within sophisticated packages.This transition directly benefits Kulicke and Soffa's Fluxless Thermo-Compression Bonding (TCB) solutions. Advanced Solutions revenues increased roughly 20% sequentially in the fiscal third quarter, setting another quarterly record. Management continues to expect Advanced Solutions revenues to exceed $100 million in fiscal 2026.KLIC is expanding Advanced Solutions manufacturing capacity to support roughly $400 million in annual TCB system sales. The increased production footprint should allow the company to address rising demand as heterogeneous integration becomes more mainstream. Improving memory conditions provide another favorable catalyst. Fiscal third-quarter memory revenues increased 8.8% sequentially to $34 million, following strong growth in the preceding quarter.KLIC currently has significant exposure to NAND packaging requirements. Management believes data centers have become the largest end application for global NAND production, suggesting that AI infrastructure investment is also indirectly benefiting the company's traditional memory business.The combination of recovering NAND capacity spending and emerging stacked-DRAM architectures could provide a broader growth opportunity as memory manufacturers increase investment in advanced assembly technologies. KLIC has gained a stellar 122.1% in the past year compared with the industry’s growth of 107%. It has outperformed peers like Veeco Instruments Inc. VECO and Axcelis Technologies, Inc. ACLS. While Veeco has gained 88.8%, Axcelis surged 52.6% during this period. One-Year KLIC Stock Price Performance Image Source: Zacks Investment Research Management's near-term outlook reinforces the positive demand picture. For the fiscal fourth quarter, Kulicke and Soffa expects revenues of approximately $375 million, implying healthy sequential growth. Non-GAAP earnings are expected to be $1.42 per share, plus or minus 10%.Demand visibility has also extended further than is typical for the company, with purchase orders extending into the second quarter of fiscal 2027. Management expects above-average demand conditions to persist through at least the first half of fiscal 2027. Kulicke & Soffa remains well-positioned to capitalize on favorable long-term semiconductor industry trends. Expanding opportunities in advanced packaging, AI infrastructure, automotive electrification and high-performance computing are expected to remain key growth drivers for the company in the coming years. Consequently, investors are likely to profit if they bet on this Zacks Rank #1 (Strong Buy) company now. You can see the complete list of today’s Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Kulicke and Soffa Industries, Inc. (KLIC) : Free Stock Analysis Report Veeco Instruments Inc. (VECO) : Free Stock Analysis Report Axcelis Technologies, Inc. (ACLS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, August 6, 2026 at 8:30 a.m. ET Senior Vice President and Interim Chief Financial Officer - David Ryzhik President and CEO - Russell Low Operator: Good day, ladies and gentlemen, and welcome to the Axcelis Technologies call to discuss the company's results for the second quarter of 2026. My name is Grace, and I will be your coordinator for today. I would now like to turn the presentation over to your host for today's call, David Ryzhik, Senior Vice President and Interim Chief Financial Officer. Please proceed. David Ryzhik: Thank you, operator. This is David Ryzhik, Senior Vice President and Interim Chief Financial Officer. And with me today is Russell Low, President and CEO. If you have not seen a copy of our press release issued earlier today, it is available on our website. In addition, we have prepared slides accompanying today's call, and you can find those on our website as well. Playback service will also be available on our website as described in our press release. Please note that comments made today about our expectations for future revenues, profits and other results are forward-looking statements under the SEC's safe harbor provision. These forward-looking statements are based on management's current expectations and are subject to the risks inherent in our business. These risks are described in detail in our annual report on Form 10-K and other SEC filings, which we urge you to review. Our actual results may differ materially from our current expectations. We do not assume any obligation to update these forward-looking statements. Given the pending merger with Veeco, we will not be addressing questions related to the transaction. During this call, we will be discussing various non-GAAP financial measures. Unless otherwise noted, all income statement-related financial measures will be non-GAAP other than revenue and other income. Please refer to our press release and accompanying materials for information regarding our non-GAAP financial results and a reconciliation to our GAAP measures. Now I'll turn the call over to President and CEO, Russell Low. Russell Low: Thank you, David. Good morning, everyone, and thank you for joining us on our second quarter 2026 earnings call. In the second quarter, we delivered revenue of $215 million and earnings per diluted share of $1.06, both above our expectations. Our results reflect strong operational execution as we capitalize on favorable demand trends in several of our key markets. In the quarter, sequential growth in systems revenue was driven by improvement in our power and general mature markets, partially offset by the expected moderation in memory due to timing of available fab space. Importantly, customer investment plans in memory remain robust, and we continue to make progress executing our strategy to expand our position within this market. CS&I delivered a strong quarter and continues to be an important driver of our overall performance. Revenue growth in the business has been supported by a growing installed base, increased customer utilization and a continued expansion of our aftermarket products and service offerings. As we shared, CS&I has been a deliberate multiyear strategic focus for us to drive growth and stability through market cycles. We are pleased to see these efforts gain traction, and we look forward to continuing to build this momentum. Bookings in the quarter grew slightly, driven by general mature and power, and book-to-bill has neared 1 over the past 3 quarters, suggesting greater stability in the end markets we serve. Turning to Slide 5. Sales to mature node applications accounted for approximately 84% of system shipments with memory and advanced logic making up the balance of our sales. Now on Slide 6, let me review our trends by end market. Within our power market, revenue for silicon carbide applications declined sequentially, consistent with our expectations as quarterly revenue can fluctuate based on shipment timings. However, bookings improved on a sequential basis and through the first half of the year exceeded the average levels we experienced over the past 2 years. In addition, we continue to expand our customer base, securing orders for 2 new customers in China during the quarter. We are also seeing next-generation technology development create opportunities for our high-energy implant capabilities. During the quarter, we secured orders from multiple customers for high-energy channeling applications using advanced superjunction architectures, further validating the value of our differentiated implant technology. From an end market perspective, long-term demand fundamentals for silicon carbide remain highly attractive. We continue to expect increasing penetration in electric vehicles, broader adoption in AI data center power infrastructure and expanding use across a wide range of commercial industrial applications that require greater power efficiency, particularly at higher voltages. In our other power market, second quarter sales grew sequentially, and we continue to view silicon power as a foundational part of the broader power semiconductor market, serving applications across automotive, industrial, commercial and data center end markets. During the quarter, we completed a successful evaluation of our Purion XEmax at a leading foundry for use in power management IC production. The evaluation demonstrated the system's ability to address increasing customer requirements for high-energy implant applications, leveraging its dual LINAC architecture and patented Boost Technology to deliver implant energies up to 15 MeV with industry-leading beam purity. In general mature, sales improved sequentially during the quarter. While we have not yet seen a pickup in order rates, we are encouraged by improving end market trends. Following a period of capacity digestion that began in 2024, customers in China continue to add capacity, and we are beginning to see signs of improving activity outside of China as well, supporting higher tool utilization rates. Our customers are benefiting from demand for AI-related data center applications manufactured on 28 nanometers and above process technologies, including optical connectivity, microcontrollers and analog ICs. General mature remains an important market for Axcelis given its high implant intensity and our broad portfolio spanning high-energy, high-current and medium-current systems. We're also seeing growing customer interest in our recently introduced Purion H6 High Current platform across general mature applications. Turning to advanced logic on Slide 7. As we noted on our last call, we shipped a system early in the second quarter for materials-modification applications supporting 2-nanometer production, and we also shipped a follow-on system in the third quarter for this application. We continue to work closely with this customer in support of its next-generation technology road map. In memory, despite the anticipated sequential decline from a strong first quarter, customer engagement remains robust. As a reminder, memory sales can be lumpy from quarter-to-quarter depending on customer fab space availability. We continue to anticipate strong year-over-year growth in 2026 with momentum extending into 2027 as customers accelerate cleanroom investments to support growing demand for DRAM and high-bandwidth memory applications driven by AI. We're also seeing our memory customer portfolio expand, highlighted by a recent order for multiple high-current systems in the current quarter, reinforcing the strength and competitiveness of our offerings. Reflecting this momentum, we continue to make progress with a leading North American memory manufacturer we referenced last quarter. Following the successful completion of our system evaluation last quarter, we received additional orders during the period to support new fab investments. On Slide 8, let me wrap up my thoughts and provide our perspective on the second half of 2026. I am pleased with the momentum we are seeing so far in 2026. Our team has executed well, delivering solid results while capitalizing on the attractive secular growth opportunities across our end markets. In addition to a strong memory outlook for 2026, we are seeing improved demand in our power market. We're also encouraged by improving customer engagement and utilization trends in our general mature market, while our CS&I revenue continues to build a growing base of revenue and profitability. As a result, we now expect second half 2026 revenue to be stronger than our initial expectations and expect to deliver year-over-year revenue growth in 2026 compared to our prior outlook for revenue to be relatively flat with 2025. Looking ahead, we believe the favorable demand trends we are seeing today are likely to continue into 2027 with memory investments expected to remain strong as customers expand fab capacity, continued improvement in our silicon carbide market and encouraging underlying trends across general mature applications. We anticipate another year of revenue growth in 2027. Before I turn the call over to David, I'd like to provide a brief update on the pending merger with Veeco. We continue to make progress on the remaining requirements for the Veeco merger, including with the State Administration for Market Regulation in China. We continue to expect the transaction to close in the second half of 2026. We remain very excited about the pending combination and the opportunity to build on the momentum and create a stronger company with enhanced capabilities, broader growth opportunities and meaningful long-term value creation potential. I want to thank our customers, employees, partners and shareholders for their continued support in Axcelis. With that, let me turn the call over to David for a closer look at our results and outlook. David Ryzhik: Thank you, Russell, and good morning, everyone. I'll first start with the financial details of the second quarter before turning to our outlook for the third quarter. Starting on Slide 9. Second quarter revenue was $215 million, consisting of system revenue of $132 million and CS&I revenue of $83 million, both exceeded our forecast. By geography, revenue in China increased sequentially to 46%, up from 40% in the prior quarter. Korea was our second largest revenue-generating region and 26% of our total revenues. In our other regions, Europe was 11%, the United States, 6%; Taiwan was 2% and Japan was 1%. The remaining 8% of revenue came from the rest of the world. Bookings were $131 million, slightly higher sequentially, continuing the trend of improving order activity with a book-to-bill ratio of approximately 1x. We exited the quarter with total backlog of $452 million. Turning to Slide 10. I'd like to share some additional detail on our results. Gross margin was 42.7%, slightly below our outlook of 43%, primarily due to mix within our CS&I business as well as higher-than-anticipated services costs, which can fluctuate from period to period. Second quarter operating expenses were $60 million, slightly above our outlook of $59 million, primarily due to higher variable compensation associated with stronger performance and, to a lesser extent, higher fringe costs. Tying it all together, our operating margin was 14.7%. Second quarter adjusted EBITDA was $36 million, and adjusted EBITDA margin was 16.7%. Other income was $5 million, higher on a sequential basis due primarily to foreign exchange gains. Our tax rate was 11%, below our forecast of 15% due to the windfall benefit associated with our equity compensation. And finally, second quarter earnings per diluted share was $1.06. Turning to Slide 11. Free cash flow for the second quarter was $15 million. This includes approximately $6 million of cash transaction expenses associated with the pending Veeco merger. We exited the second quarter with a strong balance sheet, consisting of $577 million of cash, cash equivalents and marketable securities on hand. This includes $175 million of long-term securities. With that, let me discuss our third quarter outlook on Slide 12. We expect revenue of approximately $230 million. Revenue is expected to benefit from a higher contribution from power and memory, partially offset by lower revenue from the general mature market. We expect gross margins of approximately 43%. We expect operating expenses of approximately $62 million. Adjusted EBITDA is expected to be approximately $41 million. We anticipate a tax rate of approximately 15%. And finally, we estimate net earnings per diluted share of approximately $1.11. Looking beyond the third quarter, we currently expect revenue to increase sequentially in the fourth quarter, supported by the business trends we are seeing across our markets that Russell touched on earlier. As a result, we now anticipate full year 2026 revenue growth of approximately mid-single digits year-over-year compared to our prior expectation of flat revenue. We also anticipate gross margin to improve slightly in the fourth quarter relative to third quarter levels. At the same time, we remain committed to investing in the business, particularly in technology innovation and other long-term growth initiatives. As a result, we expect fourth quarter operating expenses to be slightly higher than third quarter levels. In summary, we're executing on our strategy and remain focused on disciplined cost management while continuing to make targeted investments to capture attractive growth opportunities. We're encouraged by the trends we're seeing across the business and remain focused on delivering strong results and value creation for our shareholders. With that, operator, we're ready to take your questions. Operator: [Operator Instructions] Our first question comes from the line of Craig Ellis with Riley (sic) [ B. Riley ] Securities. Craig Ellis: Congratulations on the nice execution, team. Russell, I wanted to start off with a question on memory, understanding how the tenor of interaction with your more established customers and your newer customers has changed over the last 3 months. And as we look at near-term dynamics, which I think were indicated with memory up in the third quarter, are we at a point where we should expect memory system sales to grow sequentially? Or are we still in a period where there can be 2 steps forward and 1 step back? Russell Low: Craig, thanks for the question. So I think we're going to see memory being slightly lumpy this year. Again, until the new cleanroom space comes online, I think the customers are mostly focused on solving bottleneck issues in their existing fabs. So it's a little bit lumpy. One thing I would say, though, is '26 is a significant improvement over 2025, although [ it's off ] a low baseline, we are seeing significant DRAM memory revenue this year. And then like we said, once those cleanrooms start to come online, we expect to see the momentum continue into 2027. David Ryzhik: Yes, Craig, if you think about -- Craig, just to add, if you think about the second half for memory, probably at this point, probably looks similar to the first half. And then for the full year basis, obviously, strong growth into -- growth rate into '27, probably at a lower growth rate than the one in '26 because we're coming off a very low base, but we definitely see that momentum in memory. Craig Ellis: Yes. And next year, we get NAND capacity help, not just DRAM. And then the follow-up question is on the CS&I business. So congratulations on the real nice quarter there. My question is really what drove the magnitude of sequential strength? Is it really just in this environment, customers are looking at CS&I as one of the quickest paths to incremental capacity where they need it? Or is it really just the efficacy of better attach rates on Purion tools that are out there in the installed base? Just help us understand what drove the upside and what it might mean for the back half of the year. Russell Low: So there's a couple of things, Craig. So clearly, we are seeing a pickup in utilization rates. So we're seeing memory has really high utilization rates. We're seeing silicon carbide and silicon power picking up in utilization rates. And we're starting to see the embers of a recovery in general mature. And all those things will happen. Before you start getting orders, typically, you start to see spares and consumables going up. So that's the -- so you definitely get a component of utilization driving. The second thing is we continue to add installed base as well. But I think the really big part is that as companies are looking to ramp, they're looking to use what they have. So we've developed a lot of really valuable upgrades and a lot of those upgrades are now selling, and they're helping customers who, in some cases, are 4-wall constrained or it gives them a little bit more capacity such that they can continue to ramp their business. Operator: Our next question comes from the line of Charles Shi with Needham & Company. Yu Shi: Congrats on the pretty steady execution and exceeding the guidance and good guidance for the third quarter as well. So maybe the first question, the power -- the pickup in power in general, order rate you mentioned has been exceeding the average level you've seen over the last 2 years. Can you elaborate where the power strength really is from? Because historically, your power is closely tied to, let's say, automotive industry, but is there something different this time? Do you feel like there is more of a data center -- I know that the capacity is probably agnostic for a lot of your customers, but are you able to tell what is driving the power order rate pick-up? Russell Low: Yes. Charles, it's Russell. Thanks for the question. So when I think about where we are with power, so there's two components to it, silicon carbide and silicon, both are actually doing better. So if you look at our power business, it was in digestion for a while, but now it's into recovery, and we are expecting the second half to be stronger than the first half for power. So that's the good. We're seeing that through orders placed. So what's driving that? I mean it was in digestion and now it's coming out the other side. I think it's fair to say electric vehicles are still the #1 driver of silicon carbide. And we've talked previously about there's more electric vehicles and there's greater penetration into electric vehicles of silicon carbide, particularly 800-volt systems. When you get to 800-volt systems, you pretty much don't have a choice as to whether or not to use silicon carbide or not. And then there's all the onboard chargers we talked about and the other components and [ DC inverters. ] Electric vehicles are still doing really well. There is actually a couple of other opportunities as well in growth. And I think we've talked about data centers. And as data centers start to move to 800-volt architectures as well, you're going to see silicon carbide being the material of choice, and that's going to sit between the grid, coming in at like kilovolts, all the way down to the rack where it's be -- coming at 800 volts. So we're seeing that being -- while it's still a small area, it is growing quickly. And we shouldn't forget that as the cost of silicon carbide devices continues to come down and you see a bit more packaging of devices as well. So they have more value at the subsystem level. You're seeing -- as this is occurring, it's opening up more and more applications. So we shouldn't forget all the industrial applications like transformers and motors and even solar, solar takes up a lot of silicon carbide. So that's what's kind of driving this, and those have always been secular drivers. So that's exciting. And I'd say it's more than just China as well. It's beyond China that people are adding capacity in power. Although in some regions, they still haven't kind of like gone for higher capacity. They're still working on what I consider next-generation technology. So we have had customers ramping and customers learning. And I'd say that once those device technologies are up in volume and with yield, I think you'll start to see those customers start to ramp as well. And I'm talking about the transition from planar to trench and even to superjunction. And as we said before, as these devices become more complex, the density of implant steps goes up, and it also tilts towards high energy, which is another good tailwind for us. Yu Shi: So we understand the small -- the data center part, probably still very small, but faster growing. But based on what you see today, are you able to tell like how much of your installed base or the silicon carbide capacity in general is going into the data center application versus the electric vehicle? And we just want to get a sense on how to gauge the growth frontier, especially from the data center side. Russell Low: Yes. So we don't know necessarily what products our customers are creating with the tools. So we -- obviously, that is their business. But I think you can see from many of the customers -- so every one of the power companies is a customer. And when you see their press releases about having a portfolio that goes after data centers, then that will give you an indication of how many devices are available and how compelling they are as a business. Operator: [Operator Instructions] Our next question comes from the line of Jed Dorsheimer with William Blair. Jonathan Dorsheimer: Congrats on a solid quarter. Russell, just more of a technical question for you and kind of a market one as well. Indium phosphide, looks like implants being used for surface passivation for etch repair as well as electrical isolation. And so I'm just curious if you might talk about -- that's a pretty exciting area with a significant undercapacity at the moment. What discussions you might be having in -- and that would be for continuous wave lasers used for optical and kind of electrical-to-optical in data center racks. Russell Low: Yes. So thanks, Jed, for the question. So I think indium phosphide is a really interesting laser material. And I think the data centers talked about going into optical communications. I think for us, it's a relatively small amount. So while we will kind of continue to monitor this market, I think the implant opportunities are relatively small. I think there's much bigger opportunities in other technologies such as MOCVD. Operator: This concludes our question-and-answer session. I would now like to turn the call over -- hold on just 1 minute. We had two questions come through. Our next question comes from the line of Duksan Jang of Bank of America Securities. Duksan Jang: One question on memory. If I'm not mistaken, I think you said second half memory is going to be similar to first half. So I think that indicates about $120 million of total annual run rate. As we look into the industry, obviously, a lot of people are expecting more cleanroom space to come through really starting next year and into '28. So I'm just curious what kind of upside you just expect in this market? I assume it's going to be a strong acceleration as well. David Ryzhik: Yes, Duksan. So a little too early to size memory next year. But our indications at this point is that next year would be another year of growth. Our assumption is that there would be a much lower growth rate percentage-wise than what we're seeing in 2026 because we're coming off a pretty low base in 2025. But engagement with customers is strong. They have ambitious capacity plans. And I'd also note that we're making progress expanding beyond our traditional, as we say, strong position into other areas within the memory market and other customers. And so that's another factor to consider. So it's a good market. Implant is a critical step there, and we're pretty excited about the opportunity. Duksan Jang: Got it. And then are you seeing anything on the NAND side where I think the industry trends have clearly improved there. We might see some capacity additions there. And then as memory grows as a bigger percentage of your sales, I think it's been historically a little bit more dilutive to margins. So anything on the margin front would be helpful. Russell Low: So I'll take the NAND part of this. So when Dave was talking about the kind of the strength of memory into 2027 and cleanrooms coming on, we really are specifically kind of talking about DRAM. NAND, there's a little bit of activity, but I wouldn't, in any way, call it a trend at this stage. I think anybody who has space is using it for the higher-value DRAM. But I do see a need for more NAND coming. And as we've said in the past, when people do vertical scaling of NAND, that doesn't necessarily support us because it doesn't change the density of implants. But as people add more wafer starts, that's when NAND has a value to our business for selling more implants. So I would say that as people start allocating space to expand wafers out for NAND, that's when you'll start to see our NAND business start to go up. And historically, NAND has followed DRAM. So we are expecting that to come. But I'd say that there aren't many -- the trend -- there's no trend yet. David Ryzhik: Yes. And Duksan, I would just add on the gross margins, as you pointed out, so typically, our memory business comes at a lower-than-corporate average gross margin on the system side. But when we place those systems, that drives quite a bit of CS&I aftermarket, which is higher margin than corporate average. So over the life of the tool, long term, it's still a pretty attractive business for us. Operator: Our next question comes from the line of Craig Ellis with B. Riley Securities. Craig Ellis: I wanted to start with a higher-level question, just understanding where the company's capacity positioning was. We're annualizing at about $920 million revenues, it looks like here as we head into the back half of the year. I would expect, given where we've been over the last 5 years, our capacity would be at least 40% higher than that. But can you help calibrate that in? And secondly, related to memory, a number of years ago, the team did a great job qualifying the Purion Dragon at one memory customer. I would expect that would be part of the solution set that's going out the door. And can you just talk about the demand that you're seeing across different products and where Purion Dragon fits into that mix? David Ryzhik: Craig, just on capacity, you're right. We do have capacity to meet higher revenue levels than we are today. And quite frankly, as we absorb a little more and our markets recover, we would expect a little bit of benefit to our gross margin as well as a result from the absorption. Now clearly, mix is going to play an important role, but we do get a little bit of an absorption benefit there with higher volume. On the mix of systems, Russell can weigh in, but we're not going to get into specific systems that we're shipping to customers, but high-current is an important part of the equation for memory. And so we have a really good and competitive technology there. As you know, we're strong in high-energy, but high-energy is a little bit -- there's a little less content of high-energy in memory. And then there's medium-current as well where we have a competitive solution. So we feel like we're pretty well positioned for memory. Russell Low: Did that answer your question, Craig? Craig Ellis: Yes. Operator: This concludes the question-and-answer session. I would now like to turn it back to David Ryzhik for closing remarks. David Ryzhik: Thank you, operator. Thank you, everyone, for joining the call and your interest in Axcelis. Operator, you can close the call. Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Before you buy stock in Axcelis Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Axcelis Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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This article first appeared on GuruFocus. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Axcelis Technologies Inc (NASDAQ:ACLS) delivered Q2 2026 revenue of $215 million and EPS of $1.06, both exceeding expectations. The company raised its full-year 2026 outlook from flat revenue to mid single-digit year-over-year growth, citing stronger second-half demand. Bookings improved sequentially, with a book-to-bill ratio near 1.0 over the past three quarters, indicating greater stability in end markets. The CSI (Customer Support and Installed Base) business delivered a strong quarter, driven by higher utilization rates, a growing installed base, and successful sales of upgrades. Power market bookings improved sequentially, exceeding the average levels of the past two years, with new customer wins in China and strong demand for high-energy implant applications. Memory customer engagement remains robust, with strong year-over-year growth expected in 2026 and momentum extending into 2027, including new orders from a leading North American memory manufacturer. The company successfully shipped systems for 2-nanometer production and secured follow-on orders, strengthening its position in advanced logic. Axcelis Technologies Inc (NASDAQ:ACLS) maintains a strong balance sheet with $577 million in cash and marketable securities, generating $50 million in free cash flow during the quarter. Gross margin of 42.7% came in slightly below the company's outlook of 43%, due to unfavorable mix within the CSI business and higher-than-anticipated service costs. Memory revenue declined sequentially in Q2 due to timing of available fab space, and the company expects memory sales to remain lumpy until new cleanroom capacity comes online. The general mature market has not yet seen a pickup in order rates, despite improving end-market trends and utilization. Operating expenses of $60 million were slightly above the outlook of $59 million, driven by higher variable compensation and fringe costs. The company expects Q4 operating expenses to be slightly higher than Q3 levels due to continued investments in technology innovation and growth initiatives. The pending merger with Vico remains subject to regulatory approvals, including from China's State Administration for Market Regulation, creating uncertainty. Memory business typically carries lower gross margins on the system side, which could pressure overall profitability as memory becomes a larger percentage of sales. Warning! GuruFocus has detected 4 Warning Signs with ACLS. Is ACLS fairly valued? Test your thesis with our free DCF calculator. Q: Can you elaborate on where the power strength is really coming from? Historically, your power business is closely tied to the automotive industry, but is there something different this time, such as more data center demand? A: Russell Lowe, President and CEO: Our power business, covering both silicon carbide and silicon, was in digestion but is now in recovery, with the second half expected to be stronger than the first half. Electric vehicles remain the number one driver of silicon carbide, particularly with 800-volt systems. However, we are also seeing new growth from AI data center power infrastructure as data centers move to 800-volt architectures, which makes silicon carbide the material of choice. Additionally, declining device costs are opening up more industrial applications like transformers, motors, and solar. The recovery is not just in China; we are seeing capacity additions beyond China, and as device technologies like superjunction ramp in volume, they tilt towards high-energy implants, which is a tailwind for us. Q: Regarding memory, are we at a point where we should expect memory system sales to grow sequentially, or are we still in a period of two steps forward and one step back? A: Russell Lowe, President and CEO: Memory will remain slightly lumpy this year until new cleanroom space comes online, as customers are focused on solving bottleneck issues in existing fabs. However, 2026 is a significant improvement over 2025, with strong DRAM memory revenue. Once cleanrooms come online, we expect momentum to continue into 2027. David Reiszek, interim CFO, added that the second half for memory will likely look similar to the first half, with strong full-year growth, and 2027 will see growth at a lower rate given the low 2025 base. Q: What drove the magnitude of sequential strength in the CSI (Customer Support and Installation) business, and what might it mean for the back half of the year? A: Russell Lowe, President and CEO: The strength is driven by a couple of factors. We are seeing a pickup in utilization rates across memory, silicon carbide, and silicon power, and the beginnings of a recovery in general mature markets. Before orders pick up, spares and consumables typically increase. Additionally, we continue to add to the installed base, but the big driver is that companies are looking to use what they have. We have developed valuable upgrades that help customers who are fab-space constrained gain incremental capacity to continue ramping their business. Q: As memory grows as a bigger percentage of sales, which has historically been more dilutive to margins, can you provide any color on the margin front? A: David Reiszek, interim CFO: Typically, our memory business comes at a lower-than-corporate-average gross margin on the system side. However, when we place those systems, it drives a significant amount of CSI aftermarket business, which carries higher margins than the corporate average. Over the life of the tool, it remains a very attractive business for us. Q: Can you help calibrate the company's capacity positioning as you annualize around $920 million in revenue, and how does the Purion Dragon fit into the memory product mix? A: David Reiszek, interim CFO: We do have capacity to meet higher revenue levels than today. As we absorb more volume and our markets recover, we would expect a benefit to gross margin from absorption. Regarding memory systems, we won't get into specific systems shipped, but high current is an important part of the equation for memory, where we have strong, competitive technology. We are also strong in high energy, though there is less high-energy content in memory, and we have competitive medium-current solutions, positioning us well overall. Q: Are you seeing anything on the NAND side where industry trends have improved, potentially leading to capacity additions? A: Russell Lowe, President and CEO: The strength in 2027 is specifically about DRAM. There is a little NAND activity, but it's not a trend yet. Anyone with space is using it for higher-value DRAM. However, I do see a need for more NAND coming. When people do vertical scaling of NAND, it doesn't change implant density, but as they add more wafer starts, NAND becomes valuable for selling more implants. Historically, NAND has followed DRAM, so we expect that to come, but there's no trend yet. Q: Can you discuss the opportunities in Indium Phosphide, which uses implants for surface passivation, etch repair, and electrical isolation, particularly for continuous wave lasers in data center racks? A: Russell Lowe, President and CEO: Indium Phosphide is an interesting laser material, and data centers are moving toward optical communications. However, for us, it's a relatively small amount. While we will continue to monitor this market, the implant opportunities are relatively small. There are much bigger opportunities in other technologies such as MOCVD. Q: Given the strong memory outlook, what kind of upside should we expect in 2027 as more cleanroom space comes online? A: Russell Lowe, President and CEO: It's a little too early to size memory for next year, but indications point to another year of growth. We assume a much lower growth rate percentage-wise than 2026 because we're coming off a low 2025 base. Customer engagement is strong with ambitious capacity plans. We are also making progress expanding beyond our traditional strong position into other areas and customers within the memory market, which is another factor to consider. Q: Can you elaborate on the memory customer portfolio expansion and the progress with the leading North American memory manufacturer? A: Russell Lowe, President and CEO: We are seeing our memory customer portfolio expand, highlighted by a recent order for multiple high-current systems in the current quarter, reinforcing the strength of our offerings. Regarding the leading North American memory manufacturer we referenced last quarter, following the successful completion of our system evaluation, we received additional orders during the period to support new fab investments. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Axcelis Technologies, Inc.? Here are five stocks we like better. Axcelis exceeded second-quarter expectations with $215 million in revenue and non-GAAP EPS of $1.06, prompting the company to raise its full-year outlook to mid-single-digit revenue growth. Growth in power and mature-node markets offset weaker memory revenue, while CS&I benefited from a larger installed base and stronger equipment utilization. China accounted for 46% of quarterly revenue, and backlog stood at $452 million. Axcelis expects third-quarter revenue of approximately $230 million and sees improving demand through 2027, particularly in memory, silicon carbide and mature-node applications. The pending Veeco merger remains on track to close in the second half of 2026, subject to regulatory approvals. Small-Caps, Big Buybacks: 3 Stocks With Large Buyback Capacity Axcelis Technologies (NASDAQ:ACLS) reported second-quarter 2026 revenue of $215 million and non-GAAP diluted earnings per share of $1.06, with both figures exceeding management’s expectations. The company raised its outlook for the full year, now expecting mid-single-digit revenue growth after previously forecasting revenue roughly flat with 2025. President and CEO Russell Low said the quarter reflected “strong operational execution” amid favorable demand trends across several key markets. Systems revenue grew sequentially as improvement in power and general mature-node markets more than offset an expected moderation in memory revenue tied to the timing of available fab space. → 3 Drone Stocks That Should Soar After the Summer Slump 3 Must-Watch Semiconductor Stocks as NVIDIA Takes a Breather Low also said the company’s customer service and support business, referred to as CS&I, remained an important contributor. Growth in that segment was supported by the expanding installed base, greater customer equipment utilization and broader aftermarket products and services offerings. Senior Vice President and Interim CFO David Ryzhik said second-quarter revenue consisted of $132 million in systems revenue and $83 million in CS&I revenue. China accounted for 46% of total revenue, up from 40% in the prior quarter, while Korea represented 26%. Europe accounted for 11%, followed by the U.S. at 6%, Taiwan at 2%, Japan at 1%, and other regions at 8%. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth The 3 Favored Machinery Stocks To Buy In August Bookings totaled $131 million, slightly higher sequentially, and the company’s book-to-bill ratio was approximately 1.0. Axcelis ended the quarter with total backlog of $452 million. Gross margin was 42.7%, below the company’s approximately 43% outlook because of CS&I mix and higher-than-anticipated service costs. Operating expenses were $60 million, slightly above the $59 million forecast, primarily due to higher variable compensation and fringe costs. Operating margin was 14.7%. Adjusted EBITDA was $36 million, representing a 16.7% margin. Free cash flow was $15 million, including about $6 million in cash transaction expenses associated with the pending Veeco merger. The company ended the quarter with $577 million in cash equivalents and marketable securities, including $175 million in long-term securities. Ryzhik said other income was $5 million, primarily reflecting foreign-exchange gains, while the tax rate was 11%, below the company’s 15% forecast because of a windfall benefit tied to equity compensation. → Jersey Mike's Serves Fresh Gains After IPO Stumble In power semiconductors, silicon carbide revenue declined sequentially as expected because of shipment timing, but bookings improved and exceeded average levels from the prior two years during the first half. Axcelis secured orders from two new customers in China during the quarter and won orders from multiple customers for high-energy channeling applications using advanced superjunction architectures. Low said long-term silicon carbide demand remains supported by electric vehicles, AI data-center power infrastructure and industrial applications that require greater power efficiency. He said the company expects power market activity to be stronger in the second half than in the first half, with both silicon carbide and silicon power recovering from a period of customer capacity digestion. Axcelis also completed an evaluation of its Purion XEmax system at a leading foundry for power-management IC production. The company said the system demonstrated its ability to address high-energy implant requirements, with energies up to 15 MeV. General mature-node sales improved sequentially, although Low said the company has not yet seen a pickup in order rates. Customers in China continue to add capacity following a digestion period that began in 2024, while Axcelis is beginning to see signs of improving activity outside China. The company cited demand for AI-related data-center products built on 28-nanometer and above process technologies, including optical connectivity products, microcontrollers and analog integrated circuits. Mature-node applications represented about 84% of system shipments during the quarter, with memory and advanced logic making up the balance. In advanced logic, Axcelis shipped a system early in the second quarter for a materials-modification application supporting 2-nanometer production, followed by another shipment in the third quarter for the same application. Memory revenue declined sequentially from a strong first quarter, but management said customer engagement remained robust. Low said revenue in the segment may remain uneven until new clean-room capacity becomes available, as customers currently focus on addressing bottlenecks in existing fabs. Still, Axcelis expects strong memory revenue growth in 2026 and further growth in 2027, driven primarily by DRAM and high-bandwidth memory investments. The company said it received additional orders from a leading North American memory manufacturer following a successful system evaluation, and also received a recent order for multiple high-current systems from another memory customer. Management said NAND activity exists but has not yet become a meaningful trend, with available fab space largely being directed toward higher-value DRAM production. For the third quarter, Axcelis expects revenue of approximately $230 million, supported by higher power and memory contributions and partly offset by lower general mature revenue. The company forecast gross margin of about 43%, operating expenses of approximately $62 million, adjusted EBITDA of about $41 million, a 15% tax rate and non-GAAP diluted earnings per share of approximately $1.11. Management expects fourth-quarter revenue to increase sequentially, with gross margin improving slightly from third-quarter levels. Operating expenses are expected to rise modestly in the fourth quarter as the company continues investments in technology innovation and longer-term growth initiatives. Low said Axcelis expects favorable demand trends to continue into 2027, including sustained memory investment, continued silicon carbide improvement and stronger conditions in general mature applications. Regarding its pending merger with Veeco, Low said the companies continue to work through remaining requirements, including with China’s State Administration for Market Regulation. Axcelis continues to expect the transaction to close in the second half of 2026. Axcelis Technologies, Inc is a leading developer and manufacturer of ion implantation and cleaning equipment used in the fabrication of semiconductor chips. The company specializes in high-current, medium-current and high-energy ion implantation systems, which are critical for introducing precisely controlled dopants into silicon wafers. Axcelis also offers plasma-based cleaning and dry strip tools that support advanced process nodes in logic, memory and power device manufacturing. The company's product portfolio encompasses single-wafer and multi-wafer cluster tools designed to deliver high throughput, accuracy and uniformity for semiconductor process steps. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Axcelis Technologies Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Q2 2026 Highlights: Revenue of $215.2 million GAAP Gross Margin of 42.4%, and Non-GAAP Gross Margin of 42.7% GAAP Operating Margin of 9.4% and Non-GAAP Operating Margin of 14.7% GAAP Diluted Earnings Per Share of $0.75, and Non-GAAP Diluted Earnings Per Share of $1.06 BEVERLY, Mass., Aug. 6, 2026 /PRNewswire/ -- Axcelis Technologies, Inc. (Nasdaq: ACLS) today announced financial results for the second quarter ended June 30, 2026. President and CEO Russell Low commented, "We executed well in the second quarter, delivering results that exceeded our forecasts driven by stronger system shipments and higher CS&I volume." Low continued, "Demand in the Memory market remains robust, and we are also benefitting from positive momentum in our Power market. In General Mature, we are encouraged by improving engagement and utilization trends as customers respond to growing end-demand in data center, industrial and automotive segments. As a result, we now expect to deliver year-over-year revenue growth in 2026, with momentum carrying through to 2027. We are focused on satisfying the remaining conditions to complete our pending merger with Veeco and look forward to closing the transaction in the second half of 2026." Senior Vice President and Interim CFO David Ryzhik stated, "Axcelis delivered better than expected revenue and operating income in our second quarter, reflecting the attractive operating leverage in our business." Ryzhik concluded, "With improving systems demand in our markets and continued strength in our CS&I aftermarket business, we anticipate that Axcelis' financial performance will continue to improve over the balance of 2026." Business OutlookFor the third quarter ending September 30, 2026, Axcelis expects revenues of approximately $230 million, GAAP earnings per diluted share of approximately $0.76, and non-GAAP earnings per share of approximately $1.11. Please refer to Third Quarter 2026 Outlook under the "Notes on our Non-GAAP Financial Information" section of this document for detail relating to the computation of non-GAAP earnings per diluted share as well as the Safe Harbor Statement section of this document. Second Quarter 2026 Conference CallThe Company will host a call to discuss the results for the second quarter 2026 today at 8:30 a.m. ET. The call will be available via webcast that can be accessed through the Investors page of Axcelis' website at www.axcelis.com, or by registering as a participant here:https://register-conf.media-server.com/register/BIf61211144e3b4baeb4c13ba3b1f529faWebcast replays will be available for 30 days following the call. Use of Non-GAAP Financial ResultsThis press release includes financial measures that are not presented in accordance with U.S. generally accepted accounting principles ("non-GAAP financial measures"). These non-GAAP financial measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP income tax provision, Adjusted EBITDA, non-GAAP net income, and non-GAAP diluted earnings per share, and reflect adjustments for the impact of share-based compensation expense, certain items related to restructuring and severance charges and any associated adjustments and transaction and integration costs associated with the merger agreement with Veeco Instruments announced on October 1, 2025. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are provided in the financial tables included in this release. For further information regarding these non-GAAP financial measures, please refer to the tables presenting reconciliations of our non-GAAP results to our GAAP results and the "Notes on Our Non-GAAP Financial Information" at the end of this press release. Safe Harbor StatementThis press release contains, and the conference call will contain, forward-looking statements under the Private Securities Litigation Reform Act safe harbor provisions. These statements, which include our expectations for spending in our industry and guidance for future financial performance, are based on management's current expectations and should be viewed with caution. They are subject to various risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, many of which are outside the control of the Company, including that customer decisions to place orders or our product shipments may not occur when we expect, that orders may not be converted to revenue in any particular quarter, or at all, whether demand will continue for the semiconductor equipment we produce or, if not, whether we can successfully meet changing market requirements, and whether we will be able to maintain continuity of business relationships with and purchases by major customers. Increased competitive pressure on sales and pricing, increases in material and other production costs that cannot be recouped in product pricing and instability caused by changing global economic, political or financial conditions, including with respect to the imposition of tariffs on our products or components of our products, could also cause actual results to differ materially from those in our forward-looking statements. These risks and other risk factors relating to Axcelis are described more fully in the most recent Form 10-K filed by Axcelis and in other documents filed from time to time with the Securities and Exchange Commission. About AxcelisAxcelis (Nasdaq: ACLS), headquartered in Beverly, Mass., has been providing innovative, high-productivity solutions for the semiconductor industry for over 45 years. Axcelis is dedicated to developing enabling process applications through the design, manufacture and complete life cycle support of ion implantation systems, one of the most critical and enabling steps in the IC manufacturing process. Learn more about Axcelis at www.axcelis.com. CONTACTS: Investor Relations Contact:David RyzhikSenior Vice President and Interim CFOTelephone: (978) 787-2352Email: [email protected] Press/Media Relations Contact:Maureen HartSenior Director, Corporate & Marketing CommunicationsTelephone: (978) 787-4266Email: [email protected] View original content to download multimedia:https://www.prnewswire.com/news-releases/axcelis-announces-financial-results-for-second-quarter-2026-302844749.html

Axcelis Technologies (ACLS) came out with quarterly earnings of $1.06 per share, beating the Zacks Consensus Estimate of $0.9 per share. This compares to earnings of $1.13 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +17.78%. A quarter ago, it was expected that this semiconductor services company would post earnings of $0.71 per share when it actually produced earnings of $0.72, delivering a surprise of +1.41%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Axcelis, which belongs to the Zacks Electronics - Manufacturing Machinery industry, posted revenues of $215.18 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 4.91%. This compares to year-ago revenues of $194.54 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Axcelis shares have added about 70.1% since the beginning of the year versus the S&P 500's gain of 12.8%. While Axcelis has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Axcelis was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.03 on $215.1 million in revenues for the coming quarter and $3.82 on $845.4 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Electronics - Manufacturing Machinery is currently in the top 10% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. PodcastOne, Inc. (PODC), another stock in the broader Zacks Computer and Technology sector, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 12. This company is expected to post quarterly loss of $0.01 per share in its upcoming report, which represents a year-over-year change of +75%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. PodcastOne, Inc.'s revenues are expected to be $17.84 million, up 19% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Axcelis Technologies, Inc. (ACLS) : Free Stock Analysis Report PodcastOne, Inc. (PODC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Veeco Instruments (VECO) came out with quarterly earnings of $0.33 per share, beating the Zacks Consensus Estimate of $0.26 per share. This compares to earnings of $0.36 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +26.92%. A quarter ago, it was expected that this precision manufacturing equipment maker would post earnings of $0.2 per share when it actually produced earnings of $0.14, delivering a surprise of -30%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Veeco, which belongs to the Zacks Electronics - Manufacturing Machinery industry, posted revenues of $193.48 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 7.49%. This compares to year-ago revenues of $166.1 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Veeco shares have added about 88.2% since the beginning of the year versus the S&P 500's gain of 13%. While Veeco has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Veeco was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.58 on $220 million in revenues for the coming quarter and $1.65 on $798.3 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Electronics - Manufacturing Machinery is currently in the top 8% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Axcelis Technologies (ACLS), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This semiconductor services company is expected to post quarterly earnings of $0.90 per share in its upcoming report, which represents a year-over-year change of -20.4%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Axcelis Technologies' revenues are expected to be $205.1 million, up 5.4% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Veeco Instruments Inc. (VECO) : Free Stock Analysis Report Axcelis Technologies, Inc. (ACLS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Ultra Clean Holdings (UCTT) came out with quarterly earnings of $0.7 per share, beating the Zacks Consensus Estimate of $0.52 per share. This compares to earnings of $0.27 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +34.62%. A quarter ago, it was expected that this chipmaking equipment services company would post earnings of $0.27 per share when it actually produced earnings of $0.31, delivering a surprise of +14.81%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Ultra Clean, which belongs to the Zacks Electronics - Manufacturing Machinery industry, posted revenues of $644.9 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 10.18%. This compares to year-ago revenues of $518.8 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Ultra Clean shares have added about 228.9% since the beginning of the year versus the S&P 500's gain of 9.4%. While Ultra Clean has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Ultra Clean was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #1 (Strong Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.72 on $663.53 million in revenues for the coming quarter and $2.46 on $2.53 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Electronics - Manufacturing Machinery is currently in the top 7% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Axcelis Technologies (ACLS), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This semiconductor services company is expected to post quarterly earnings of $0.90 per share in its upcoming report, which represents a year-over-year change of -20.4%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Axcelis Technologies' revenues are expected to be $205.1 million, up 5.4% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ultra Clean Holdings, Inc. (UCTT) : Free Stock Analysis Report Axcelis Technologies, Inc. (ACLS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

KLA KLAC is set to report its fourth-quarter fiscal 2026 results on July 28.For the to-be-reported quarter, KLAC expects revenues of $3.575 billion, plus/minus $200 million. The Zacks Consensus Estimate for revenues is pegged at $3.61 billion, indicating an increase of 13.71% from the year-ago quarter’s reported figure.The consensus mark for earnings is pegged at $1 per share, unchanged over the past 30 days, indicating year-over-year growth of 6.38%. Image Source: Zacks Investment Research KLAC’s earnings have surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 3.99%. KLA Corporation price-eps-surprise | KLA Corporation Quote Let us see how things have shaped up for the upcoming announcement. KLA’s fourth-quarter fiscal 2026 performance is likely to have benefited from continued strength in leading-edge foundry and logic spending, driven by AI infrastructure deployments. The company indicated that customer investments remained robust across advanced logic nodes, where rising design complexity, larger die sizes and higher-value wafers require greater process control intensity. KLAC also expected foundry/logic to account for roughly 82% of semiconductor process control systems revenues in the June quarter.The to-be-reported quarter is likely to have benefited from accelerating demand for advanced packaging inspection and metrology tools. Strong demand for hybrid bonding technologies used in AI processors and high-performance computing applications has been a key catalyst. Growing investments in High-bandwidth memory (HBM) are expected to have supported KLA’s inspection and metrology business. HBM’s larger die sizes, higher performance requirements and lower defect tolerance increase demand for process control solutions, which bodes well for KLA. Broader adoption of EUV in DRAM manufacturing was also expected to raise inspection intensity, supporting memory-related revenues during the to-be-reported quarter.Despite healthy demand, higher DRAM chip prices used in KLA’s image processing computers are expected to have remained a headwind during the quarter. Management projected that these elevated memory costs would reduce gross margin by roughly 100 basis points (bps) and expected the pricing pressure to persist through calendar 2026, even though sufficient supply had been secured.Although revenues were projected to increase sequentially, KLAC guided for a slightly weaker product mix in the fiscal fourth quarter compared with the fiscal third quarter. This less favorable mix, together with ongoing memory cost inflation, is expected to have limited gross margin expansion in the to-be-reported quarter. KLA shares have jumped 80% year to date (YTD), outperforming the broader Zacks Computer and Technology sector’s return of 13.2%. The company has outperformed peers, including Applied Materials AMAT, Teradyne TER and Axcelis Technologies ACLS, YTD. Shares of Applied Materials, Teradyne and Axcelis have returned 123.9%, 93.1% and 76.1%, respectively, over the same timeframe. Image Source: Zacks Investment Research The KLAC stock is not so cheap, as suggested by the Value Score of F. In terms of the forward 12-month price-to-earnings (P/E), KLAC is trading at 42.48X, higher than the broader sector and peers. The broader sector is trading at 23.73X while Applied Materials, Axcelis and Teradyne trade at 37.22X, 32.42X and 43.91X, respectively. Image Source: Zacks Investment Research KLA continues to be one of the biggest beneficiaries of AI-driven semiconductor manufacturing. KLAC has repeatedly emphasized that AI infrastructure spending is increasing demand across foundry/logic, HBM memory and advanced packaging, all of which require significantly higher levels of inspection and metrology. The company is expected to benefit from strong demand visibility as management expects calendar 2026 wafer equipment spending to exceed $140 billion.Advanced packaging has become one of KLA’s fastest-growing businesses as AI accelerators increasingly rely on chiplets, hybrid bonding and heterogeneous integration. KLA continues to widen its leadership in semiconductor process control and now expects semiconductor process control revenues from advanced packaging to increase to approximately $1 billion in calendar 2026, up from roughly $635 million in 2025. The company also noted that advanced packaging equipment demand is now growing faster than originally anticipated, with packaging spending expected to grow more than 30% industrywide.However, KLA is suffering from higher DRAM prices that have increased the cost of image-processing computers that ship with KLA’s systems. The company expects elevated memory prices to persist through at least calendar 2026. KLAC also continues to face evolving U.S. export restrictions, tariffs and other trade limitations that could restrict equipment shipments or service opportunities for certain Chinese customers. KLA enters its fourth-quarter fiscal 2026 earnings release with strong momentum, supported by sustained AI-driven semiconductor investments, expanding advanced packaging opportunities and healthy demand across leading-edge foundry and HBM markets. While higher DRAM costs, product mix headwinds and geopolitical uncertainties remain risks, the company’s leadership in process control and favorable long-term industry trends position it well for continued growth. Investors will closely watch whether KLA can sustain its strong execution, protect margins and provide an upbeat outlook for fiscal 2027 amid an evolving semiconductor spending environment.KLA currently has a Zacks Rank #3 (Hold), which implies that investors should wait for a more favorable point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report KLA Corporation (KLAC) : Free Stock Analysis Report Applied Materials, Inc. (AMAT) : Free Stock Analysis Report Teradyne, Inc. (TER) : Free Stock Analysis Report Axcelis Technologies, Inc. (ACLS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research