KLA (KLAC)
Market Price (4/5/2026): $1513.01 | Market Cap: $198.6 BilSector: Information Technology | Industry: Semiconductor Materials & Equipment
KLA (KLAC)
Market Price (4/5/2026): $1513.01Market Cap: $198.6 BilSector: Information TechnologyIndustry: Semiconductor Materials & Equipment
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 42% Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 37%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 34%, CFO LTM is 4.8 Bil, FCF LTM is 4.4 Bil Low stock price volatilityVol 12M is 49% Megatrend and thematic driversMegatrends include Artificial Intelligence, Automation & Robotics, Advanced Materials, and 5G & Advanced Connectivity. Show more. | Stock price has recently run up significantly12M Rtn12 month market price return is 165% Key risksKLAC key risks include [1] its substantial revenue from China being threatened by U.S. Show more. |
| Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 42% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 37%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 34%, CFO LTM is 4.8 Bil, FCF LTM is 4.4 Bil |
| Low stock price volatilityVol 12M is 49% |
| Megatrend and thematic driversMegatrends include Artificial Intelligence, Automation & Robotics, Advanced Materials, and 5G & Advanced Connectivity. Show more. |
| Stock price has recently run up significantly12M Rtn12 month market price return is 165% |
| Key risksKLAC key risks include [1] its substantial revenue from China being threatened by U.S. Show more. |
Qualitative Assessment
AI Analysis | Feedback
1. Strong Financial Performance and Enhanced Shareholder Returns.
KLA reported robust fiscal second-quarter 2026 results (ending December 31, 2025) on January 29, 2026, with non-GAAP diluted EPS of $8.85 and revenues of $3.30 billion, both surpassing analyst expectations. Further boosting investor confidence, on March 12, 2026, the company announced an additional $7 billion share repurchase program and a 21% increase in its quarterly dividend, raising it to $2.30 per share from $1.90.
2. Significant Analyst Upgrades and Raised Price Targets.
Multiple financial analysts initiated upgrades and substantially increased their price targets for KLA during this period. For example, Wells Fargo upgraded KLA from "Equal Weight" to "Overweight" on January 15, 2026, boosting its price target to $1,600 from $1,250. Similarly, Oppenheimer raised its price target from $1,800.00 to $1,900.00 on March 13, 2026, with other firms like TD Cowen and Citigroup also raising their targets to $1,800.00.
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Stock Movement Drivers
Fundamental Drivers
The 25.0% change in KLAC stock from 12/31/2025 to 4/4/2026 was primarily driven by a 15.8% change in the company's P/E Multiple.| (LTM values as of) | 12312025 | 4042026 | Change |
|---|---|---|---|
| Stock Price ($) | 1213.50 | 1516.84 | 25.0% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 12,524 | 12,745 | 1.8% |
| Net Income Margin (%) | 33.8% | 35.8% | 5.7% |
| P/E Multiple | 37.7 | 43.7 | 15.8% |
| Shares Outstanding (Mil) | 132 | 131 | 0.4% |
| Cumulative Contribution | 25.0% |
Market Drivers
12/31/2025 to 4/4/2026| Return | Correlation | |
|---|---|---|
| KLAC | 25.0% | |
| Market (SPY) | -5.4% | 57.9% |
| Sector (XLK) | -5.5% | 68.0% |
Fundamental Drivers
The 41.0% change in KLAC stock from 9/30/2025 to 4/4/2026 was primarily driven by a 25.0% change in the company's P/E Multiple.| (LTM values as of) | 9302025 | 4042026 | Change |
|---|---|---|---|
| Stock Price ($) | 1075.40 | 1516.84 | 41.0% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 12,156 | 12,745 | 4.8% |
| Net Income Margin (%) | 33.4% | 35.8% | 7.0% |
| P/E Multiple | 35.0 | 43.7 | 25.0% |
| Shares Outstanding (Mil) | 132 | 131 | 0.6% |
| Cumulative Contribution | 41.0% |
Market Drivers
9/30/2025 to 4/4/2026| Return | Correlation | |
|---|---|---|
| KLAC | 41.0% | |
| Market (SPY) | -2.9% | 63.1% |
| Sector (XLK) | -3.4% | 70.4% |
Fundamental Drivers
The 124.8% change in KLAC stock from 3/31/2025 to 4/4/2026 was primarily driven by a 55.8% change in the company's P/E Multiple.| (LTM values as of) | 3312025 | 4042026 | Change |
|---|---|---|---|
| Stock Price ($) | 674.68 | 1516.84 | 124.8% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 10,847 | 12,745 | 17.5% |
| Net Income Margin (%) | 29.6% | 35.8% | 20.9% |
| P/E Multiple | 28.0 | 43.7 | 55.8% |
| Shares Outstanding (Mil) | 133 | 131 | 1.6% |
| Cumulative Contribution | 124.8% |
Market Drivers
3/31/2025 to 4/4/2026| Return | Correlation | |
|---|---|---|
| KLAC | 124.8% | |
| Market (SPY) | 16.3% | 69.0% |
| Sector (XLK) | 32.3% | 76.4% |
Fundamental Drivers
The 290.6% change in KLAC stock from 3/31/2023 to 4/4/2026 was primarily driven by a 181.9% change in the company's P/E Multiple.| (LTM values as of) | 3312023 | 4042026 | Change |
|---|---|---|---|
| Stock Price ($) | 388.34 | 1516.84 | 290.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 10,484 | 12,745 | 21.6% |
| Net Income Margin (%) | 33.8% | 35.8% | 5.9% |
| P/E Multiple | 15.5 | 43.7 | 181.9% |
| Shares Outstanding (Mil) | 141 | 131 | 7.6% |
| Cumulative Contribution | 290.6% |
Market Drivers
3/31/2023 to 4/4/2026| Return | Correlation | |
|---|---|---|
| KLAC | 290.6% | |
| Market (SPY) | 63.3% | 67.1% |
| Sector (XLK) | 83.6% | 76.8% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| KLAC Return | 68% | -11% | 56% | 9% | 94% | 25% | 520% |
| Peers Return | 66% | -39% | 74% | -2% | 51% | 34% | 250% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | -4% | 75% |
Monthly Win Rates [3] | |||||||
| KLAC Win Rate | 75% | 42% | 67% | 42% | 58% | 75% | |
| Peers Win Rate | 68% | 33% | 65% | 48% | 62% | 75% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 50% | |
Max Drawdowns [4] | |||||||
| KLAC Max Drawdown | 0% | -38% | -5% | -6% | -8% | 0% | |
| Peers Max Drawdown | -1% | -50% | -6% | -10% | -33% | -0% | |
| S&P 500 Max Drawdown | -1% | -25% | -1% | -2% | -15% | -7% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: AMAT, LRCX, ONTO, VECO, MKSI. See KLAC Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 4/2/2026 (YTD)
How Low Can It Go
| Event | KLAC | S&P 500 |
|---|---|---|
| 2022 Inflation Shock | ||
| % Loss | -40.8% | -25.4% |
| % Gain to Breakeven | 69.1% | 34.1% |
| Time to Breakeven | 221 days | 464 days |
| 2020 Covid Pandemic | ||
| % Loss | -37.5% | -33.9% |
| % Gain to Breakeven | 60.1% | 51.3% |
| Time to Breakeven | 75 days | 148 days |
| 2018 Correction | ||
| % Loss | -33.6% | -19.8% |
| % Gain to Breakeven | 50.7% | 24.7% |
| Time to Breakeven | 87 days | 120 days |
| 2008 Global Financial Crisis | ||
| % Loss | -75.6% | -56.8% |
| % Gain to Breakeven | 309.8% | 131.3% |
| Time to Breakeven | 1,790 days | 1,480 days |
Compare to AMAT, LRCX, ONTO, VECO, MKSI
In The Past
KLA's stock fell -40.8% during the 2022 Inflation Shock from a high on 1/14/2022. A -40.8% loss requires a 69.1% gain to breakeven.
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About KLA (KLAC)
AI Analysis | Feedback
KLA is like the ASML of quality control and yield management for the semiconductor industry, providing the essential inspection and metrology tools that ensure chips are made perfectly.
KLA is like GE Healthcare for semiconductor factories, but instead of diagnosing human health, they provide the advanced diagnostic and inspection systems that ensure the quality and efficiency of chip manufacturing.
KLA is like Palantir for chip factories, but instead of analyzing intelligence data for governments, they analyze manufacturing data to find defects, optimize processes, and improve the yield of complex semiconductors.
AI Analysis | Feedback
- Defect Inspection and Review Systems: Systems designed to identify and analyze defects on semiconductor wafers and chips.
- Metrology Solutions: Tools providing precise measurements of critical dimensions and features during semiconductor manufacturing.
- In Situ Process Monitoring Products: Systems that offer real-time monitoring of manufacturing processes within the production environment.
- Computational Lithography Software: Software used to optimize the lithography process for creating patterns on wafers.
- Data Analytics Systems: Solutions that process and analyze manufacturing data to enhance yield and process control across semiconductor fabrication.
- Wafer Processing Systems: Equipment utilized for various stages of semiconductor wafer fabrication, including advanced packaging.
- Die Sorting and Inspection Systems: Solutions for inspecting and accurately sorting individual semiconductor dies.
- IC Component Inspection and Metrology Systems: Systems for inspecting and measuring integrated circuit components at various stages.
- Reticle Inspection Systems: Specialized systems for inspecting photomasks, known as reticles, used in semiconductor lithography.
- Support and Other Services: Comprehensive services including installation, maintenance, training, and technical support for their product lines.
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Major Customers of KLA Corporation (KLAC)
KLA Corporation primarily sells its process control and yield management solutions to other companies within the semiconductor and related nanoelectronics industries, rather than to individuals. While KLA does not publicly disclose the names of individual major customers due to the competitive nature of the industry and the fact that no single customer accounts for more than 10% of its total revenues, its customer base consists of leading companies across key segments of the semiconductor supply chain. The major categories of companies that purchase KLA's products and services include:-
Integrated Device Manufacturers (IDMs): These are companies that design, manufacture, and sell their own integrated circuits.
- Examples: Intel Corporation (NASDAQ: INTC), Micron Technology, Inc. (NASDAQ: MU), Texas Instruments Incorporated (NASDAQ: TXN)
-
Foundries: Companies that specialize in manufacturing integrated circuits for other fabless semiconductor companies.
- Examples: Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM), GlobalFoundries Inc. (NASDAQ: GFS), United Microelectronics Corporation (NYSE: UMC)
-
Outsourced Semiconductor Assembly and Test (OSAT) Companies: Firms that provide packaging and testing services for semiconductors manufactured by other companies.
- Examples: ASE Technology Holding Co., Ltd. (NYSE: ASX), Amkor Technology, Inc. (NASDAQ: AMKR)
- Mask Shops: Companies that produce photomasks, which are critical components used in the photolithography process for manufacturing integrated circuits. These are often divisions of major foundries/IDMs or specialized independent entities.
- Manufacturers in Related Nanoelectronics Industries: This broader category includes companies involved in the production of compound semiconductors, power devices, light-emitting diodes (LEDs), microelectromechanical systems (MEMS), data storage media/heads, and other advanced electronic components.
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Rick Wallace, President and Chief Executive Officer
Rick Wallace joined KLA Instruments in 1988 as an applications engineer and has held various general management positions throughout his tenure, becoming CEO in 2006. His prior experience includes positions at Procter & Gamble and Cypress Semiconductor. Mr. Wallace has served on the Board of Directors for companies such as Marvell Technology, Splunk, Proofpoint, NetApp, SEMI, and Beckman Coulter. He once led the initiative to start a new business within KLA.
Bren Higgins, Executive Vice President and Chief Financial Officer
Bren Higgins joined KLA in 1999 and has held numerous roles within the company, including multiple division controller assignments, group controller for KLA's largest business group, senior director of financial planning and analysis, and Vice President of corporate finance. He is responsible for KLA's worldwide finance and accounting, global manufacturing, logistics and supply chain operations, business development (including mergers and acquisitions), workplace services, IT, and investor relations.
Ahmad Khan, President, Semiconductor Products and Customers
Ahmad Khan joined KLA in 2004 (or 2003) in business development and has since moved into management roles for multiple product divisions. This includes serving as general manager of the Optical Films Metrology division and Group Vice President for the Patterning Division. Before joining KLA, Mr. Khan spent nine years at Applied Materials in various project engineering and management positions.
Ben Tsai, Chief Technical Officer and Executive Vice President, Corporate Alliances
Ben Tsai has over 35 years of experience at KLA, having held a wide range of technology and leadership roles, including Vice President and general manager of the wafer inspection division. He was named Chief Technology Officer in 1994. Prior to his current role, he served as Senior Vice President of technology at Tokyo Electron Limited. Mr. Tsai holds approximately 50 patents in inspection and metrology.
John Van Camp, Executive Vice President and Chief Human Resources Officer
Before joining KLA, John Van Camp held a variety of leadership positions in human resources. His previous roles include manager at General Electric and Vice President of Human Resources at Gap Inc.
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The key risks to KLA Corporation (KLAC) are:-
Geopolitical Risks and Export Controls
KLA Corporation faces significant geopolitical risks, particularly from evolving U.S. government export controls and trade tensions. These include regulations from the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce, which can disrupt KLA's business and limit its access to certain markets, especially China. Trade disputes, tariffs, and potential retaliatory tariffs from other countries could increase production costs, disrupt supply chains, and negatively impact demand for KLA's products, leading to order cancellations and financial losses.
-
Supply Chain Disruptions and Dependence on Limited Suppliers
The company is vulnerable to supply chain disruptions, including shortages of raw materials or components. KLA has faced challenges in managing its supply chain, and for certain critical parts, it relies on a single supplier or a limited group of suppliers. Such dependencies can lead to delays in product delivery, impact customer satisfaction, and disrupt KLA's production processes, affecting revenues.
-
Intense Competition and Cyclicality of the Semiconductor Industry
The semiconductor equipment market is highly competitive, with several well-established players. This intense competition can exert pressure on KLA's market share and profit margins. Additionally, the semiconductor industry is cyclical, meaning that fluctuations in capital spending on semiconductor equipment can introduce uncertainty and variability in demand for KLA's products and services.
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KLA Corporation (KLAC) operates in several significant addressable markets related to semiconductor manufacturing process control and yield management.
Semiconductor Process Control Equipment Market
The global market for semiconductor process control equipment, a primary area for KLA, was valued at approximately USD 10.34 billion in 2024 and is projected to grow to USD 16.60 billion by 2032, exhibiting a Compound Annual Growth Rate (CAGR) of 6.10%. Other estimates for this market include USD 7.58 billion in 2024, projected to reach USD 13.05 billion by 2032 with a CAGR of 7.03%, and USD 8.57 billion in 2025, expected to reach USD 12.93 billion by 2032 with a CAGR of 6.05%. In the U.S. specifically, the semiconductor process control equipment market was valued at USD 1.32 billion in 2024 and is projected to reach USD 2.30 billion by 2032, with a CAGR of 7.21%. KLA holds a leading market share of around 56% in process control.
Semiconductor Metrology and Inspection Equipment Market
This market, which includes defect inspection and review systems and metrology solutions crucial to KLA's offerings, had a global market size estimated between USD 8.98 billion and USD 9.8 billion in 2024, with projections to grow to between USD 16.21 billion by 2033 and USD 18.7 billion by 2034 at a CAGR of 6.9%. In 2025, the global market size is estimated between USD 13.03 billion and USD 14.92 billion, with projections to reach between USD 16.95 billion by 2030 and USD 27.56 billion by 2034. The U.S. market for semiconductor metrology and inspection was valued at over USD 2.6 billion in 2024.
Wafer Inspection Equipment Market
For wafer inspection equipment, a core product area for KLA, the global market size was estimated at USD 5.72 billion in 2024, is estimated to reach USD 6.23 billion in 2025, and is expected to grow to USD 9.22 billion by 2030, at a CAGR of 8.15% during the forecast period (2025-2030). Another source estimates the global market at USD 4.9 billion in 2025, projected to reach USD 13.3 billion by 2035 with a CAGR of 10.6%.
Semiconductor Defect Inspection Equipment Market
The global semiconductor defect inspection equipment market was valued at USD 6.14 billion in 2025 and is projected to grow from USD 6.59 billion in 2026 to USD 13.41 billion by 2034, exhibiting a CAGR of 9.03%.
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Expected Drivers of Future Revenue Growth for KLA Corporation (KLAC)
- Demand for AI Infrastructure: KLA Corporation is significantly benefiting from the increasing demand for artificial intelligence (AI) infrastructure across all major wafer fabrication equipment (WFE) growth markets. The company's management and analysts consistently highlight AI as a primary driver of outsized growth in the semiconductor industry, directly impacting KLA's revenue.
- Growth in Advanced Packaging: Advanced packaging solutions represent a substantial and rapidly growing revenue stream for KLA. The company has reported significant year-over-year growth in advanced packaging revenue for 2024 and 2025, with projections indicating continued strong momentum in the mid-to-high teens for 2026. This growth is driven by the increasing complexity of semiconductor designs and customer interest in applying front-end capabilities to packaging.
- Increasing Process Control Intensity for Advanced Logic and Smaller Nodes: As semiconductor manufacturing progresses to more advanced nodes, such as 2nm and beyond, the "process control intensity" required per wafer increases significantly. KLA's leadership in process control, inspection, and metrology solutions positions it to capitalize on this trend, as these technologies become even more critical for managing yield in complex chip fabrication processes for advanced logic and high-bandwidth memory (HBM).
- Consistent Growth of the Services Business: KLA's services business has demonstrated a track record of continuous year-over-year growth, contributing a predictable and recurring revenue stream. This segment provides ongoing maintenance, optimization, and support for KLA's extensive installed base of equipment, further enhancing customer success and securing revenue independent of the cyclical nature of equipment sales.
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Share Repurchases
- KLA's Board of Directors approved a new $7 billion share repurchase program in March 2026, adding to an existing $5 billion program announced in April 2025 which had $3.94 billion remaining as of December 31, 2025.
- The company's annual share repurchases amounted to $2.15 billion in 2025, $1.736 billion in 2024, and $1.312 billion in 2023.
- In the first quarter of fiscal 2026 (ending in September 2025), KLA repurchased $545 million worth of shares.
Capital Expenditures
- KLA Corporation is characterized by an "extremely asset-light" business model, with capital expenditures typically around 3% of revenue, which is noted as the lowest in the semiconductor equipment industry.
- The company's capital expenditures for fiscal year 2025 were $100.4 million.
- KLA outsources most of its hardware manufacturing, focusing its capital on optical system design, software development, and system integration.
Latest Trefis Analyses
| Title | Date | |
|---|---|---|
| DASHBOARDS | ||
| KLA Stock Up 6.3% in One Day, Wait For A Dip To Buy The Stock | 03/10/2026 | |
| What Is Happening With KLA Stock? | 03/07/2026 | |
| With KLA Stock Sliding, Have You Assessed The Risk? | 03/07/2026 | |
| How KLA Stock Gained 90% | 02/20/2026 | |
| KLA Stock May Have More Upside | 02/10/2026 | |
| KLA Stock (-15%): Guidance Disappoints, Sparks Profit-Taking | 01/31/2026 | |
| Why KLA Stock Jumped 90%? | 01/31/2026 | |
| KLAC Stock Surges 12% With A 5-day Winning Spree On Record Earnings Beat | 01/30/2026 | |
| ARTICLES | ||
| Why LRCX, KLAC Could Outperform Teradyne Stock | 03/11/2026 | |
| KLA Stock To $997? | 03/10/2026 | |
| KLA Stock Drop Looks Sharp, But How Deep Can It Go? | 03/07/2026 | |
| KLA Stock Surged 100%, Here’s Why | 02/18/2026 | |
| KLA Stock May Still Have Room to Run | 02/10/2026 |
Trade Ideas
Select ideas related to KLAC.
| Date | Ticker | Company | Category | Trade Strategy | 6M Fwd Rtn | 12M Fwd Rtn | 12M Max DD |
|---|---|---|---|---|---|---|---|
| 03312026 | PANW | Palo Alto Networks | Insider | Insider Buys | Low D/EStrong Insider BuyingCompanies with strong insider buying in the last 1 month, positive operating income and reasonable debt / market cap | 0.0% | 0.0% | 0.0% |
| 03312026 | ALKT | Alkami Technology | Insider | Insider Buys 45DStrong Insider BuyingCompanies with multiple insider buys in the last 45 days | 0.0% | 0.0% | 0.0% |
| 03272026 | DBX | Dropbox | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 2.6% | 2.6% | 0.0% |
| 03272026 | DLB | Dolby Laboratories | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 3.5% | 3.5% | 0.0% |
| 03272026 | PTC | PTC | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 3.5% | 3.5% | 0.0% |
| 11212025 | KLAC | KLA | Quality | Q | Momentum | UpsideQuality Stocks with Momentum and UpsideBuying quality stocks with strong momentum but still having room to run | 34.4% | 34.4% | 0.0% |
| 09302022 | KLAC | KLA | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 32.8% | 53.5% | -13.0% |
Research & Analysis
Invest in Strategies
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Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 226.55 |
| Mkt Cap | 107.5 |
| Rev LTM | 8,337 |
| Op Inc LTM | 2,958 |
| FCF LTM | 2,437 |
| FCF 3Y Avg | 2,008 |
| CFO LTM | 2,706 |
| CFO 3Y Avg | 2,230 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 5.9% |
| Rev Chg 3Y Avg | 3.0% |
| Rev Chg Q | 4.1% |
| QoQ Delta Rev Chg LTM | 1.0% |
| Op Mgn LTM | 22.3% |
| Op Mgn 3Y Avg | 22.9% |
| QoQ Delta Op Mgn LTM | -0.1% |
| CFO/Rev LTM | 31.8% |
| CFO/Rev 3Y Avg | 28.2% |
| FCF/Rev LTM | 25.9% |
| FCF/Rev 3Y Avg | 23.7% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 107.5 |
| P/S | 10.2 |
| P/EBIT | 37.1 |
| P/E | 48.8 |
| P/CFO | 32.0 |
| Total Yield | 2.5% |
| Dividend Yield | 0.4% |
| FCF Yield 3Y Avg | 3.8% |
| D/E | 0.0 |
| Net D/E | -0.0 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | 4.0% |
| 3M Rtn | 24.5% |
| 6M Rtn | 50.1% |
| 12M Rtn | 171.0% |
| 3Y Rtn | 195.2% |
| 1M Excs Rtn | 5.4% |
| 3M Excs Rtn | 35.6% |
| 6M Excs Rtn | 57.1% |
| 12M Excs Rtn | 115.8% |
| 3Y Excs Rtn | 132.4% |
Comparison Analyses
Segment Financials
Revenue by Segment| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Semiconductor Process Control | 8,734 | 9,324 | 7,925 | 5,735 | 4,745 |
| Printed Circuit Boards (PCB) and Component Inspection | 552 | 632 | 832 | 813 | 727 |
| Specialty Semiconductor Process | 529 | 543 | 457 | 369 | 330 |
| Corporate allocations and effects of changes in foreign currency exchange rates | -3 | -3 | -2 | 1 | 0 |
| Other | 1 | 4 | |||
| Total | 9,812 | 10,496 | 9,212 | 6,919 | 5,806 |
Price Behavior
| Market Price | $1,516.84 | |
| Market Cap ($ Bil) | 199.1 | |
| First Trading Date | 03/26/1990 | |
| Distance from 52W High | -9.8% | |
| 50 Days | 200 Days | |
| DMA Price | $1,474.39 | $1,172.48 |
| DMA Trend | up | up |
| Distance from DMA | 2.9% | 29.4% |
| 3M | 1YR | |
| Volatility | 59.5% | 48.1% |
| Downside Capture | 1.16 | 1.09 |
| Upside Capture | 392.05 | 237.54 |
| Correlation (SPY) | 55.3% | 66.4% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | 2.48 | 2.42 | 2.73 | 2.54 | 1.79 | 1.90 |
| Up Beta | 1.18 | 3.67 | 2.20 | 1.86 | 1.65 | 1.83 |
| Down Beta | 3.52 | 1.70 | 2.10 | 2.13 | 1.62 | 1.64 |
| Up Capture | 298% | 287% | 539% | 573% | 522% | 2237% |
| Bmk +ve Days | 7 | 16 | 27 | 65 | 139 | 424 |
| Stock +ve Days | 13 | 23 | 37 | 75 | 151 | 423 |
| Down Capture | 161% | 212% | 200% | 190% | 140% | 112% |
| Bmk -ve Days | 12 | 23 | 33 | 58 | 110 | 323 |
| Stock -ve Days | 9 | 19 | 26 | 51 | 101 | 328 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with KLAC | |
|---|---|---|---|---|
| KLAC | 124.7% | 49.4% | 1.80 | - |
| Sector ETF (XLK) | 31.5% | 27.0% | 0.99 | 76.4% |
| Equity (SPY) | 16.1% | 19.0% | 0.67 | 69.0% |
| Gold (GLD) | 50.5% | 28.0% | 1.46 | 21.3% |
| Commodities (DBC) | 16.2% | 17.7% | 0.77 | 29.8% |
| Real Estate (VNQ) | 3.6% | 16.5% | 0.04 | 35.1% |
| Bitcoin (BTCUSD) | -21.5% | 44.0% | -0.42 | 34.4% |
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Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with KLAC | |
|---|---|---|---|---|
| KLAC | 38.0% | 42.6% | 0.89 | - |
| Sector ETF (XLK) | 16.3% | 24.7% | 0.59 | 78.0% |
| Equity (SPY) | 11.6% | 17.0% | 0.53 | 70.2% |
| Gold (GLD) | 21.7% | 17.8% | 1.00 | 15.2% |
| Commodities (DBC) | 11.6% | 18.8% | 0.51 | 17.4% |
| Real Estate (VNQ) | 3.3% | 18.8% | 0.08 | 36.4% |
| Bitcoin (BTCUSD) | 3.9% | 56.5% | 0.29 | 28.3% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with KLAC | |
|---|---|---|---|---|
| KLAC | 38.2% | 40.9% | 0.93 | - |
| Sector ETF (XLK) | 21.4% | 24.3% | 0.81 | 77.4% |
| Equity (SPY) | 14.0% | 17.9% | 0.67 | 71.0% |
| Gold (GLD) | 14.0% | 15.9% | 0.73 | 10.5% |
| Commodities (DBC) | 8.4% | 17.6% | 0.40 | 21.1% |
| Real Estate (VNQ) | 5.2% | 20.7% | 0.22 | 42.6% |
| Bitcoin (BTCUSD) | 66.2% | 66.8% | 1.06 | 20.9% |
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Returns Analyses
Earnings Returns History
Expand for More| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 1/29/2026 | -15.2% | -21.0% | -8.8% |
| 10/29/2025 | -1.7% | -0.7% | -6.2% |
| 7/31/2025 | 0.9% | 3.8% | -0.6% |
| 4/30/2025 | -3.8% | -1.2% | 8.0% |
| 1/30/2025 | -0.6% | 2.6% | -6.7% |
| 10/30/2024 | -3.7% | -3.2% | -6.2% |
| 7/24/2024 | 0.9% | 8.9% | 5.8% |
| 4/25/2024 | 4.9% | 1.4% | 16.0% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 14 | 16 | 15 |
| # Negative | 10 | 8 | 9 |
| Median Positive | 4.0% | 4.5% | 11.9% |
| Median Negative | -3.7% | -3.2% | -6.2% |
| Max Positive | 9.0% | 15.7% | 33.9% |
| Max Negative | -15.2% | -21.0% | -11.3% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 12/31/2025 | 01/30/2026 | 10-Q |
| 09/30/2025 | 10/31/2025 | 10-Q |
| 06/30/2025 | 08/08/2025 | 10-K |
| 03/31/2025 | 05/01/2025 | 10-Q |
| 12/31/2024 | 01/31/2025 | 10-Q |
| 09/30/2024 | 10/31/2024 | 10-Q |
| 06/30/2024 | 08/05/2024 | 10-K |
| 03/31/2024 | 04/26/2024 | 10-Q |
| 12/31/2023 | 01/26/2024 | 10-Q |
| 09/30/2023 | 10/27/2023 | 10-Q |
| 06/30/2023 | 08/04/2023 | 10-K |
| 03/31/2023 | 04/28/2023 | 10-Q |
| 12/31/2022 | 01/27/2023 | 10-Q |
| 09/30/2022 | 10/28/2022 | 10-Q |
| 06/30/2022 | 08/05/2022 | 10-K |
| 03/31/2022 | 04/29/2022 | 10-Q |
Recent Forward Guidance [BETA]
Latest: Q2 2026 Earnings Reported 1/29/2026
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| Q3 2026 Revenue | 3.20 Bil | 3.35 Bil | 3.50 Bil | 3.9% | Raised | Guidance: 3.23 Bil for Q2 2026 | |
| Q3 2026 GAAP Gross Margin | 59.62% | 60.62% | 61.62% | -0.3% | -0.2% | Lowered | Guidance: 60.8% for Q2 2026 |
| Q3 2026 Non-GAAP Gross Margin | 60.75% | 61.75% | 62.75% | -0.4% | -0.2% | Lowered | Guidance: 62.0% for Q2 2026 |
| Q3 2026 GAAP Diluted EPS | 8.07 | 8.85 | 9.63 | 4.6% | Raised | Guidance: 8.46 for Q2 2026 | |
| Q3 2026 Non-GAAP Diluted EPS | 8.3 | 9.08 | 9.86 | 4.4% | Raised | Guidance: 8.7 for Q2 2026 | |
Prior: Q1 2026 Earnings Reported 10/29/2025
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| Q2 2026 Revenue | 3.08 Bil | 3.23 Bil | 3.38 Bil | 2.4% | Raised | Guidance: 3.15 Bil for Q1 2026 | |
| Q2 2026 GAAP Gross Margin | 59.8% | 60.8% | 61.8% | 0.2% | 0.1% | Raised | Guidance: 60.7% for Q1 2026 |
| Q2 2026 Non-GAAP Gross Margin | 61.0% | 62.0% | 63.0% | 0 | 0 | Affirmed | Guidance: 62.0% for Q1 2026 |
| Q2 2026 GAAP Diluted EPS | 7.68 | 8.46 | 9.24 | 2.2% | Raised | Guidance: 8.28 for Q1 2026 | |
| Q2 2026 Non-GAAP Diluted EPS | 7.92 | 8.7 | 9.48 | 2.0% | Raised | Guidance: 8.53 for Q1 2026 | |
Insider Activity
Expand for More| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Higgins, Bren D | EVP & Chief Financial Officer | Direct | Sell | 12182025 | 1237.01 | 2,254 | 2,788,221 | 39,775,314 | Form |
| 2 | Wallace, Richard P | President and CEO | Direct | Sell | 11132025 | 1203.10 | 10,803 | 12,997,089 | 97,704,964 | Form |
| 3 | Khan, Ahmad A | President, Semi. Prod. & Cust. | Direct | Sell | 9092025 | 900.00 | 4,564 | 4,107,600 | 20,527,427 | Form |
| 4 | Khan, Ahmad A | President, Semi. Prod. & Cust. | Direct | Sell | 9022025 | 881.50 | 13,716 | 12,090,654 | 24,128,640 | Form |
| 5 | Higgins, Bren D | EVP & Chief Financial Officer | Direct | Sell | 8222025 | 878.53 | 2,301 | 2,021,498 | 30,228,812 | Form |
KLAC Trade Sentinel
ACCUMULATE (Score 7-8)
CONVICTION RATIONALE
The probability-adjusted skew of 1.88x is attractive. While the raw skew is balanced, the high probability assigned to the upside scenario (driven by a widening moat and strong secular AI trends) makes the risk-reward profile favorable. The investment thesis hinges on the durable, multi-year nature of the AI-driven semiconductor cycle, which outweighs the near-term risk of a cyclical peak, justifying an Accumulate rating.
STOCK ARCHETYPE
Cyclical / CommodityKLA operates in the highly cyclical semiconductor capital equipment industry. Its revenue is tied to the capital expenditure cycles of major chipmakers. The business exhibits 'Commodity' characteristics in that its fortune is linked to the broader supply/demand balance for semiconductor manufacturing capacity. Applying 'Cyclical Inversion' is critical; valuation must be assessed based on normalized, mid-cycle earnings power, not peak or trough results.
INVESTMENT THESIS
The primary driver for KLA is the increasing capital intensity of process control for manufacturing next-generation semiconductors. As chipmakers transition to sub-3nm nodes and complex 3D packaging (like HBM) to serve the AI market, the need for KLA's yield management and inspection equipment grows non-linearly. Errors become exponentially more expensive, making KLA's technology indispensable, allowing it to outgrow the broader wafer fabrication equipment (WFE) market.
- Semiconductor Process Control segment grew 9.0% YoY, indicating strong demand for its core offering.
- Management cites a 'strengthening backlog into late FY 2026' and 'accelerated customer momentum' driven by the AI infrastructure buildout.
- KLA is dominant in the highest-value customer segments: 'Leading-Edge Foundry R&D' and 'High-Volume Memory Manufacturer', which are the epicenters of the AI-driven capex cycle.
- The global semiconductor industry is projected to grow 26% in 2026, providing a strong secular tailwind.
PRIMARY RISK
The most significant risk is a cyclical downturn triggered by a pause or reduction in capital expenditures by KLA's key customers (e.g., TSMC, Samsung, Intel) after the current, unprecedented wave of AI-related spending. Mixed signals, such as Intel's flat-to-down 2026 capex guidance, suggest the cycle may be front-loaded, leading to a period of 'digestion' where orders decelerate sharply.
- Key risk identified is 'Major Customer CapEx Digestion/Re-evaluation', with a potential timing of the next 30-90 days based on customer earnings calls.
- Intel, a key customer, has guided 2026 capex to be 'flat to down slightly'.
- The memory market is experiencing an unsustainable 90-95% QoQ price increase for DRAM, which historically incentivizes over-investment and leads to a subsequent bust cycle and capex cuts.
| KPI | Threshold | Rationale |
|---|---|---|
| Semiconductor Process Control Revenue Growth (YoY) | Maintain >10% | This is the core growth engine (91% of revenue). Deceleration below double-digits, especially if Service Revenue growth also slows, would be the first sign that the cycle is turning. |
| Forward 12-Month CapEx Guidance from TSMC, Intel, Samsung | Positive or Stable YoY Growth | This is the most critical leading indicator. Any mention of 'capital efficiency', 'tool reuse', or downward revisions to capex plans would be a major red flag for future equipment orders. |
| Non-GAAP Gross Margin | Stays above 61.5% | Management has guided for a 75-100 basis point headwind from DRAM costs. A dip below their guided floor could signal more severe supply chain issues or a loss of pricing power, impacting profitability. |
The AI Super-Cycle vs. Cyclical Digestion
BULL VIEW
Bulls bet the AI-driven capex boom is a multi-year 'Super-Cycle', justifying strong backlogs and high-single-digit growth.
CORE TENSION
Whether secular AI demand can sustain growth and pricing power against historical semiconductor cyclicality, rising costs, and geopolitical headwinds.
PREVAILING SENTIMENT
The current NEUTRAL sentiment is supported by the conflict between accelerating Service Revenue (+18% YoY) and decelerating core Semiconductor Process Control revenue (+9% YoY), alongside guided gross margin pressure from DRAM costs.
BEAR VIEW
Bears see a classic cyclical peak, anticipating a capex 'digestion' period, margin compression from DRAM costs, and China risks.
| Timeline | Event & Metric To Watch |
|---|---|
Next 30-90 Days | Major Customer (TSMC, Intel, Samsung) Earnings Calls Watch: Forward-looking capital expenditure (CapEx) guidance for FY2026 and FY2027. |
Late April 2026 | KLA FY26 Q3 Earnings Call Watch: Non-GAAP Gross Margin guidance; commentary on the impact of DRAM component costs. |
Next 2 Quarters | Memory Pricing & Inventory Data Release Watch: Deceleration in DRAM/NAND spot and contract price momentum via market data sources (e.g., TrendForce). |
Anytime | US Commerce Dept. (BIS) Policy Update Watch: Any revision to the 'case-by-case' license review policy for AI semiconductor exports to China. |
| Date | Event | Stock Impact |
|---|---|---|
2025-09-10 | Goldman Sachs Communacopia + Technology Conference Details: KLA's participation in a major tech conference provided an update on its strategic positioning. The modest stock gain reflects continued investor confidence following the engagement. | Slight 1.6% gain $916.19 -> $931.06 |
2025-10-29 | Q1 FY2026 Earnings Release Details: KLA reported a beat on both revenue and EPS for its first fiscal quarter, continuing its long streak of outperformance and confirming strong execution. An Investor Day was also announced for March 12, 2026. | Rose significantly by 2.4% $1204.01 -> $1233.21 |
2025-11-05 | Annual Meeting of Stockholders Details: The company held its annual stockholder meeting. The positive stock reaction suggests routine proceedings with no negative surprises, maintaining investor confidence in the company's governance and strategy. | Rose significantly by 2.8% $1191.49 -> $1225.04 |
2025-12-03 | UBS Global Technology and AI Conference Details: KLA presented at the UBS conference, likely reinforcing its strong position in the AI ecosystem and contributing to positive investor sentiment during a period of strong market performance for the stock. | Modest 1.8% gain $1189.86 -> $1211.75 |
2026-01-29 | Q2 FY2026 Earnings Release Details: KLA beat revenue and EPS estimates, but the stock fell sharply on concerns around wafer fabrication equipment (WFE) growth commentary and softer than expected free cash flow. | Stock plummeted -15.2% $1684.71 -> $1427.94 |
2026-02-05 | KLA Declares Regular Cash Dividend Details: KLA announced a regular quarterly cash dividend. The strong positive market reaction suggests high investor confidence in the company's capital return program and cash flow generation. | Stock surged +8.4% $1331.03 -> $1442.95 |
Position Sizing
4%-6%
NORMAL
The stock's 'Explosive' and 'Spiking' volatility profile (4.55x S&P 500) mandates a risk-managed approach. While the moat is strong and visibility is high, the Neutral sentiment prevents a max allocation. This is a classic Scenario 3, capping size to manage drawdowns.
Diversification Alternatives
ASML
INDUSTRYOffers a monopolistic position in EUV lithography, a critical industry bottleneck with a multi-year backlog, providing superior long-term visibility and a stronger competitive moat compared to KLAC.
TER
INDUSTRYOperates in the less volatile Automated Test Equipment (ATE) market, which is more tied to chip design complexity and volume than the highly cyclical front-end wafer fab equipment (WFE) construction cycle that drives KLAC.
KLA is evolving from a cyclical Wafer Fab Equipment (WFE) provider to the indispensable quality gatekeeper for the AI era, where increasing chip complexity and advanced packaging create a structural tailwind for its high-margin process control tools.
Filter all news through the lens of process control intensity: does this news increase the number of inspection/metrology steps required per wafer, especially for AI-related chips (logic, memory, packaging)?
Customer capex announcements for leading-edge logic (<3nm) or High-Bandwidth Memory (HBM); reports of yield challenges at new process nodes (e.g., Gate-All-Around); market share gains in advanced packaging inspection; WFE market forecasts revised upwards.
Significant cuts to capex by top 3 customers (TSMC, Samsung, Intel); breakthroughs in yield management by competitors (Applied Materials, Onto Innovation); tightened US export restrictions to China impacting a significant portion of revenue.
Broad semiconductor cycle fluctuations (already priced in); quarterly regional revenue mix shifts (concentration in Taiwan, China, Korea is normal); single-product announcements without quantifiable market impact.
Repricing Catalyst
The transition to Gate-All-Around (GAA) transistors and 3D packaging for AI accelerators is structurally increasing the capital intensity of process control. This secular trend is driving demand for KLA's high-margin inspection and metrology tools, supporting revenue growth and margin stability even amid broader market cyclicality.
Semiconductor Process Control
$12.0B TTM (91.1% of Total) · 62.6% MarginWhat It Is
Wafer inspection systems, reticle inspection systems, metrology solutions (e.g., Surfscan), and data analytics software used to find and analyze microscopic defects during chip manufacturing.
Who Pays & How
Major semiconductor fabs like TSMC, Samsung, and Intel pay for KLA's tools because they are essential for achieving high yields on complex, leading-edge manufacturing processes. The high cost of a KLA tool is justified by preventing the loss of millions of dollars in scrapped wafers, creating high switching costs.
Competition
Specialty Semiconductor, PCB & Display
$1.1B TTM (8.9% of Total) · 62.6% MarginWhat It Is
Inspection, testing, and measurement equipment for printed circuit boards (PCBs), flat panel displays (FPDs), and specialty semiconductors. Much of this capability came from the Orbotech acquisition.
Who Pays & How
Manufacturers of electronics components for various end markets including automotive and consumer electronics, who require these tools for quality and yield control.
Competition
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