What Changed For KLA Stock, And What Did Not?
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KLA (KLAC) stock fell 30.0% from August 8 to November 6, 2026, compared with a 4.7% loss for the S&P 500. This period included the company’s October 28 earnings report. An owner is counting on KLA’s sales to keep climbing with spending on chips for AI, and on its margins holding up while memory costs stay high. So what did the fall change: KLA’s business and its profit, or the price you pay for it?
KLA’s Share Price Fell As Its Profit Grew
Investors paid 48.4 times KLA’s earnings over the past twelve months at the end of September. By the November 6 close, they paid 34.4 times the same earnings. Net income over those twelve months reached $5.26 billion, up from $4.24 billion a year earlier. So you now pay much less for each dollar KLA earns, even as the company earns more of them. Even after the fall, KLA’s multiple remains above the 21.8 times earnings of the S&P 500.
The shares rallied on October 29, the day after the report. The sharpest drop arrived a week later with a 13.3% fall on November 5. From August 8 to November 6, Applied Materials fell 38% and Lam Research lost 36%, so KLA’s drop was smaller than theirs.
Quarterly Sales Growth At KLA Has Sped Up
KLA’s revenue growth against a year earlier has accelerated for three straight quarters. It rose from 7.2% in fiscal Q2 2026 to 28.9% in fiscal Q1 2027, the quarter ended September 30. Management guided December-quarter revenue to $4.7 billion, plus or minus $200 million, compared with the $4.14 billion KLA reported for the September quarter.
Management tied that growth to leading-edge chips for AI and to advanced packaging, where it expects revenue from process control systems to reach $1.1 billion in calendar 2026. Semiconductor Process Control, KLA’s main business, generated $12.2 billion of the company’s $13.6 billion in revenue during fiscal 2026.
Management said on the fiscal Q1 2027 call that demand is strong, but KLA remains behind in supply with lead times averaging around 12 months. It added that some customers have put deliveries on hold while they wait for their own facilities.
Have KLA’s Margins Held Up Against Memory Costs?
So far, yes: KLA’s reported operating margin was 45.0% in the September quarter, up from 41.7% a year earlier. Management said persistently high memory costs for the image processing in its systems are offsetting the extra profit KLA would otherwise keep as sales grow.
Management guided December-quarter gross margin to 62.5%, plus or minus one percentage point on its own adjusted measure. This compares with 62.7% on the same measure for the September quarter. It also said the memory environment will continue to be challenging, and expects gross margin to be in line with its Investor Day target of 63% to 64% in the middle to the back half of 2027 and into 2028.
KLA’s profitability has continued to climb. Its 42.6% operating margin over the past twelve months is the highest at any quarter end in data going back to fiscal Q2 2017. Sales growth looks firmer today than margins, which management expects to stay under pressure from memory costs. KLA’s gross margin is the number to watch when the company reports in January 2027.
Does This Mean You Should Act On KLAC?
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