How KLA Stock Gained 80%
KLA (KLAC)’s stock skyrocketed nearly 80%, fueled by robust revenue growth and soaring margins, as investors bet big on its AI-driven momentum and semiconductor prowess. Behind the surge lies a perfect storm of tech demand and market dominance—unpacking this reveals why the rally may be just beginning.
| 10242024 | 10242025 | Change | |
|---|---|---|---|
| Stock Price ($) | 659.8 | 1,182.8 | 79.3% |
| Change Contribution By | LTM | LTM | |
| Total Revenues ($ Mil) | 9,812.2 | 12,156.2 | 23.9% |
| Net Income Margin (%) | 28.1% | 33.4% | 18.7% |
| P/E Multiple | 32.1 | 38.5 | 19.7% |
| Shares Outstanding (Mil) | 134.5 | 132.0 | 1.8% |
| Cumulative Contribution | 79.2% |
So what is happening here? The stock surged 79%, driven by a 24% rise in revenue, a 19% boost in net margin, and a 20% jump in valuation multiple. Let’s see how recent moves sparked these gains.
Before we get into details of events that led to stock surge, here is what market wisdom says: Single stock can be risky, but there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. Separately, consider what could long-term performance for your portfolio be if you combined 10% commodities, 10% gold, and 2% crypto with equities.
Here Is Why KLA Stock Moved
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- Strong Financial Results: KLA consistently exceeded Q1-Q4 FY25 revenue and EPS guidance. Q4 FY25 revenues were $3.175B, non-GAAP EPS $9.38.
- AI/HPC Demand Surge: Insatiable demand for AI and High-Performance Computing drove semiconductor investments.
- Process Control Dominance: KLA held 56% market share in process control, crucial for complex chip manufacturing.
- Advanced Packaging Growth: Advanced packaging revenue expected to exceed $925M in 2025, up from $500M in 2024.
- Semiconductor Market Exp: Global semiconductor equipment sales forecast to reach $125.5B in 2025, up 7.4%.
Our Current Assesment Of KLAC Stock
Opinion: We currently find KLAC stock attractive but volatile. Why so? Have a look at the full story. Read Buy or Sell KLAC Stock to see what drives our current opinion.
Risk: A good way to gauge risk with KLAC is to check its biggest dips during major market sell-offs. The stock fell about 73% in the Dot-Com crash and 75% in the Global Financial Crisis. Even in more recent events like the 2018 correction and Covid pandemic, it dropped over 30%. The inflation shock last year pushed it down around 40%. So, while KLAC has strong fundamentals, it’s clear that nothing is immune when markets really turn south.
Picking winners on a consistent basis is not an easy task – especially given the volatility associated with a single stock. Instead, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.