The Reason To Buy KLA Stock Today
Shares of KLA (KLAC) closed at $165.74 on October 16, 2026, marking a 19.9% decline from the stock’s close just two weeks earlier. A drop of that speed forces investors to decide whether to buy the dip or exit before the floor falls further. The case for buying KLA now rests on two factors: the stock’s historical performance following similar selloffs, and the current health of its underlying business. So how did buyers do after KLA’s earlier drops of this size?
KLA Stock Rose A Year After All Eight Drops
Since January 2010, KLA stock has recorded nine earlier drops of more than 20% over a matter of weeks. Eight of those declines are now more than a year old, and the stock traded higher one year later in all eight instances. Buyers saw a median gain of 67% over that 12-month period. Even the weakest result, which followed the drop of March 2022, yielded a gain of 14%. The ninth drop occurred in July 2026 and remains too recent to evaluate.
Yet those recoveries rarely began immediately. Most buyers watched the stock fall further before it rebounded. In the median case, the lowest close in the year following a drop was 7.4% below the price on the drop date. That drawdown was steeper after the March 2022 drop, when the lowest close sat 21.3% below it. Investors also required patience. Buyers waited a median of 347 days, or about 11 months, to see the highest price of that year.
| Time after a past dip | Past dips with that much time after them | Median KLAC price change |
|---|---|---|
| 21 trading days | 9 | 8.0% |
| 63 trading days | 8 | 26.0% |
| 126 trading days | 8 | 31.0% |
| 252 trading days | 8 | 67.0% |
| Dip date | KLAC price change over the 30 trading days to the dip date | SPY price change over the same days | KLAC price change 252 trading days after the dip date | Highest price in those 252 trading days, against the dip-date price | Calendar days to that highest price | Lowest price in those 252 trading days, against the dip-date price |
|---|---|---|---|---|---|---|
| 2026-07-28 | -25.0% | 0.0% | window not complete | window not complete | window not complete | window not complete |
| 2025-04-04 | -23.4% | -16.0% | 203.6% | 203.6% | 371 | 0% |
| 2024-11-15 | -22.0% | 2.0% | 81.0% | 103.0% | 348 | -5.7% |
| 2022-09-26 | -20.4% | -14.0% | 49.0% | 71.3% | 345 | -13.3% |
| 2022-03-01 | -24.1% | -7.0% | 14.0% | 28.6% | 331 | -21.3% |
| 2020-03-12 | -26.6% | -24.0% | 138.0% | 172.5% | 341 | -9.0% |
| 2018-10-10 | -20.0% | -4.0% | 75.0% | 77.4% | 351 | -12.7% |
| 2011-09-02 | -20.3% | -12.0% | 54.0% | 60.6% | 237 | -1.6% |
| 2010-01-29 | -22.0% | -3.0% | 59.0% | 62.4% | 363 | -2.7% |
| Median of 8 complete windows | – | – | 67.0% | 74.4% | 347 | -7.4% |
Buying more KLA after a fall makes one stock a bigger share of what you own. See how to protect a concentrated position.
Is KLA’s Business Still Growing Under The Drop?
Yes. KLA posted a revenue increase of 11.7% to $13.6 billion over the four fiscal quarters ending June 30, 2026. The company maintained an operating margin of 41.7% during that time, compared with 18.5% for the S&P 500. Operations brought in $4.14 billion of cash over those same quarters. Semiconductor Process Control remained the core of the business, making up 90.1% of KLA’s sales in fiscal 2025.
Executives expect that momentum to continue. KLA guided to revenue of $4 billion, plus or minus $200 million, for the September quarter, which is fiscal Q1 2027. That compares with the $3.66 billion it reported for fiscal Q4 2026. The company also expects its advanced packaging process control systems revenue to reach about $1.1 billion in calendar 2026, representing an increase of more than 70%.
What Are You Paying For KLA Stock Now?
Investors today pay 44.8 times KLA’s earnings over the last four fiscal quarters. That sits well above the 22.9 times multiple for the S&P 500. At that multiple, buyers are paying for the growth to keep coming.
Challenges remain in certain segments. Management noted during the fiscal Q4 2026 earnings call on July 28 that KLA was still dealing with headwinds from memory pricing. The company expected memory chipmakers to make up about 27% of KLA’s Semiconductor Process Control systems sales to chip customers in the September quarter. Management also said competitors have shipped into fabs in China that KLA has not been able to ship into, though KLA gained share anyway.
The case for buying breaks if revenue growth slows. Anyone purchasing shares today should also expect to sit through a further fall first, just as buyers did after most past drops. KLA’s revenue growth is the key number to watch at its next report for the September quarter.
Is Too Much Of Your Wealth Riding On One Stock?
A fall like this makes KLA holders want to act, by buying more or by getting out. When one position grows into a large part of your wealth, a sharp fall can hurt your whole plan, and selling to spread the money out can bring a large tax bill. Glenn Caldicott, CIO of our Boston-based partner firm Empirical Asset Management, an SEC-registered investment adviser, offers a free 15-minute strategy review of ways to protect a concentrated position and unwind it with less tax.