One Reason KLA Stock Looks Better Than Its Price
Most investors still view KLA (KLAC) as a traditional wafer inspection company. However, the business selling inspection tools for advanced packaging is beginning to stand out, and management ties this demand to the expansion of AI. Packaging may be part of what buyers are currently paying for. The stock costs 51.4 times earnings, against 21.9 for the S&P 500, yet overall sales grew 15% from a year earlier in fiscal Q4 2026. A price that high beside that growth rate presents a clear contradiction. So, how big has KLA’s packaging business become?
KLA’s Packaging Forecast: About $1.1 Billion In Calendar 2026
Management expects about $1.1 billion of revenue from packaging process control systems in calendar 2026. That figure represents an increase of more than 70% from a year earlier. The company provided this raised forecast during its fiscal Q4 2026 call on July 28, 2026, stepping up from an earlier expectation of growth in the high 50% range.
Management stated that the expansion of AI requires new, complex packaging steps, alongside additional KLA systems to bring those processes to high-volume production. Furthermore, customers adopting newer packaging methods such as hybrid bonding are buying more inspection tools, the company said.
Packaging remains a small fraction of the overall business at KLA, which recorded $13.6 billion in sales over the last twelve months. Yet management expects this segment to grow more than 70% in calendar 2026.
Does Packaging Help KLA With Rising Costs?
Not directly. While packaging brings KLA more sales, the segment does not alter what the company pays for parts.
Costs surfaced repeatedly on the July 28 call. KLA is buying memory components at higher prices, and management indicated those headwinds will “likely continue through next year.” When asked why the company could not simply raise its own prices to match, executives explained that it is difficult to adjust pricing on existing orders. Instead, new prices are established when new products come out.
Despite these material costs, gross margin reached 62.4% in fiscal Q4 2026, landing at the upper end of KLA’s guidance. Looking ahead to the September quarter, which KLA has yet to report, management forecast 62.5%, plus or minus 1 percentage point.
Sales are also expanding. Management listed advanced packaging among the factors behind its record fiscal Q4 revenue of $3.66 billion. The company then guided to $4 billion for the September quarter, plus or minus $200 million.
Can KLA Build Its Tools Fast Enough?
Not during the first half of calendar 2026. Management noted that shortages of some long-lead-time materials held the company back during that period. KLA’s lead times currently sit at about 12 months across the company, stretching closer to 18 to 24 months on certain products. Building new capacity for those components can take 12 to 24 months. KLA says it is adding capacity to support the demand it expects.
That timeline matters for the packaging business because the cited revenue figure is a forecast for the year, not a recorded result. KLA must physically build the tools before it can sell them.
Ultimately, KLA’s packaging revenue forecast for calendar 2026 is the number to watch when the company reports its September quarter.
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