KLA Rival Calibrates New Buy Zone As Top Funds Scoop Up Shares

The semiconductor equipment group ranks a stellar No. 3 among the 197 groups Investor’s Business Daily tracks and features industry powerhouses like Advanced Energy Industries (AEIS) and ASML (ASML). Metrology leader Nova (NVMI) has also etched its name on that list as Nova stock calibrates a new buy point.

Showing institutional demand for shares, Nova (NVMI) — which also earns a spot on the IBD 50 — landed a spot on the latest monthly list of new buys by the best mutual funds. ASML stock led the list, while Advanced Energy and Photronics (PLAB) also made the latest screen.

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Nova holds the 4th spot in the highly ranked semiconductor group that also includes Lam Research (LRCX) and **KLA Corp. ** (KLAC).

Who Competes With Nova In Metrology Space?

Based in Israel, Nova creates material, optical and chemical metrology products for advanced process control in semiconductor manufacturing. Its key partners include** Intel** (INTC), Taiwan Semiconductor (TSMC) and Samsung Electronics.

In addition to KLA, Nova’s main rivals in the metrology industry include Applied Materials (AMAT), Onto Innovation (ONTO) and lithography giant ASML.

Demand for artificial intelligence technology is spurring the need for Nova’s offerings. Considered a so-called pick-and-shovel AI stock, the company’s metrology and inspection tools aids in the production of advanced AI chips.

Find Top-Rated Stocks In Tough Market

Double-Digit Earnings Growth Forecast To Continue

On Feb. 12, Nova said its fourth-quarter earnings rose 10% to $2.14 per share on 14% sales growth to $222.6 million. In 2026, analysts expect the company to post a 20% increase in earnings to $10.33 per share. That should be followed by a 21% rise to $12.49 a share in 2027.

Over the last three years, Nova has produced average earnings growth of 25%. Boosted by an annual pretax profit margin of 37.6% and a 25.2% annual return on equity, the company earns an SMR Rating of A. The rating tracks sales growth, profit margins and ROE.

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Nova Stock Shows Market-Leading Strength As Breakout Nears

Holding support above its sharply rising 10-week moving average, Nova stock continues to form a consolidation pattern. The buy point is 507.27.

In a telltale sign of market leadership, the relative strength line earns a blue dot in MarketSurge.

Nova stock on Monday held support at its 21-day exponential moving average then jumped during Wednesday’s session. On Thursday, shares spiked over 3% after bouncing off the 50-day moving average.

To spot rising technical strength, look for the shorter-term 21-day line, which has started to level off as trending down since the middle of February.

But with Dow, S&P 500 and Nasdaq now all below their 200-day moving averages, investors should keep risk management top of mind. That includes heeding sound rules for how to buy stocks and when to sell.

Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.

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