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MKS Instruments Upgraded to Strong Buy on Expanding Presence


On Jun 13, MKS Instruments MKSI was upgraded to a Zacks Rank #1 (Strong Buy). The upgrade reflects the fact that the company is benefiting from increasing demand in the semiconductor and advanced markets.

The buyout of Newport Corporation, sturdy demand for innovative products and superior customer relationships are responsible for driving the company’s top line.

Notably, shares of MKS Instruments have gained 34.6% in the past year, outperforming the industry’s 22.1% rally.

Key Drivers

MKS Instruments is riding on robust expansion in semiconductor business, which constitutes a significant portion of its sales. Notably, in the last reported quarter, sales to semiconductor customers increased 26% year over year to $313 million.

MKS Instruments is well positioned to gain from double-digit growth in the semiconductor business, which is growing on the back of increasing demand for data storage and data processing applications

The company’s investments in dielectric etch have paid off as significant growth in its key design wins led to increased orders. The company noted that investments in conductor etch are beginning to generate design wins and are expected to drive future sales.

Moreover, the company’s Newport acquisition is helping it expand its total addressable market opportunities into growing markets like industrial technologies, life and health sciences and research and defense.

MKS Instruments stands to benefit from growing innovation in photonics and laser processing. We note that the company is winning orders in the laser business.

Notably, the company anticipates the laser materials processing marke will be worth around $4.5 billion by 2022.

Other Stocks to Consider

Investors can also consider Baidu BIDU, Advanced Energy Industries AEIS and The Trade Desk TTD from the broader Computer & Technology sector. All the stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Baidu, Advanced Energy Industries and The Trade Desk is currently projected to be 21.8%, 9 % and 22.5%, respectively.

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