Jim Cramer Explains Why He Recommends Buying KLA (KLAC) Stock in Small Doses

Jim Cramer advised viewers of his September 1 Mad Money show that KLA Corporation (KLAC) stock is a "great company" but cautioned against buying large amounts at once due to its high volatility. The semiconductor capital equipment company has seen significant growth, with its shares up 40% in 2021 and trading at a forward price-to-earnings multiple of 31.65x.

KLA's dominance in semiconductor process control and inspection, coupled with its intellectual property, makes it a crucial player in the industry. However, Cramer emphasized the need for caution, noting that such stocks can experience sharp price swings. He recommended buying small doses of KLAC stock rather than all at once to mitigate risk.

Insider Monkey reported that institutional investors, including hedge funds, have shown interest in KLAC, with 81 funds holding positions in the stock during the second quarter. Despite this, short interest remains low at 2.16% of the float, indicating limited bearish sentiment.