Top IT Stocks Based on Peter Lynch's Strategy

Trimble Inc. (TRMB) and KLA Corp. (KLAC) are top-rated Information Technology stocks according to Validea's P/E/Growth Investor model based on Peter Lynch's strategy. TRMB is a large-cap value stock with a rating of 91% due to its reasonable price relative to earnings growth and strong balance sheet. KLAC is a large-cap growth stock with a rating of 69% due to its strong underlying fundamentals and valuation. Both companies provide technology solutions across various industries.

Two prominent Information Technology (IT) stocks, Trimble Inc. (TRMB) and KLA Corp. (KLAC), have shown robust financial performance in the second quarter of 2025, according to their latest earnings reports. Both companies are highly rated by Validea's P/E/Growth Investor model, with TRMB earning a 91% rating and KLAC securing a 69% score.

Trimble Inc. reported a revenue of $875.7 million for Q2 2025, surpassing the analyst estimate of $835.29 million. This represents a 1% increase year-over-year and an 8% rise on an organic basis. The company's annualized recurring revenue (ARR) reached a record $2.21 billion, marking a 5% year-over-year increase and a 13% organic growth. The GAAP operating income was $127.8 million, accounting for 14.6% of revenue, while the non-GAAP operating income was $222.6 million, or 25.4% of revenue. Trimble's GAAP net income stood at $89.2 million, with a diluted EPS of $0.37, exceeding the estimated EPS of $0.31. The non-GAAP net income was $169.4 million, resulting in a non-GAAP diluted EPS of $0.71. The adjusted EBITDA was $239.9 million, representing 27.4% of revenue. The company also repurchased $50.0 million worth of shares in the second quarter, contributing to a year-to-date total of $677.4 million [1].

KLA Corp. saw its price target raised by JPMorgan from $900 to $1,070, reflecting the company's strong performance in the June quarter. The upward revision follows KLAC's robust performance in cutting-edge foundry services and high-bandwidth memory solutions. The firm highlighted KLAC's growing traction in advanced packaging technologies as another key growth driver. JPMorgan's revised target reflects improved fundamental outlook and upward adjustments to its financial estimates for the company [2].

Both companies provide technology solutions across various industries. Trimble Inc. focuses on connecting workflows and asset lifecycles across industries such as construction, geospatial, and transportation. KLA Corp. is a leading semiconductor wafer fabrication equipment (WFE) manufacturer, specializing in semiconductor process control.

Trimble's strong Q2 performance underscores its successful execution of the Connect & Scale strategy, which focuses on enhancing recurring revenue streams and improving operational efficiencies. The company's ability to exceed both revenue and earnings estimates highlights its resilience and adaptability in a challenging macroeconomic environment. Looking ahead, Trimble has raised its full-year 2025 guidance, expecting revenue between $3,480 million and $3,560 million, with GAAP EPS ranging from $1.55 to $1.70 and non-GAAP EPS from $2.90 to $3.06 [1].

KLA's business performance reflects its technological leadership in semiconductor process control. The company has maintained consistent revenue per share growth, with predictable expansion in both top-line performance and earnings. The company's specialization in yield management systems creates high switching costs for customers, as these systems are integral to maintaining production quality. KLA's exposure to advanced packaging technologies positions it well for industry trends toward heterogeneous integration and 3D chip stacking [2].

Both companies demonstrate strong financial health and growth potential, making them attractive investment opportunities for investors and financial professionals. However, it is essential to consider the risks associated with these investments, including market volatility and potential fluctuations in demand for their respective products and services.

References:
[1] https://www.gurufocus.com/news/3039614/trimble-inc-trmb-q2-2025-earnings-eps-of-037-beats-estimate-revenue-surpasses-expectations-at-8757-million
[2] https://www.gurufocus.com/news/3026986/kla-corp-klac-price-target-raised-to-1070-by-jpmorgan?mobile=true