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KLA Corporation exhibits a bullish trend, with price action showing higher highs and recapturing its 30-week EMA. KLAC's fundamentals are robust, with FY 2027 and FY 2028 revenue and EPS estimates projecting 33%-57% and 44%-77% growth, respectively. Management targets doubling revenues and a 123% EPS increase by FY 2030, supported by strong cash flow, buybacks, and consistent dividend hikes.

Stocks tied to the AI infrastructure buildout take Charles Moon's (@ProsperTradingAcademy) attention on Tuesday's Big 3. He thinks Qualcomm (QCOM) will establish a new stock floor thanks to a new deal with Amazon (AMZN), likes SK Hynix (SKHY) above its IPO price, and calls KLA Corp. (KLAC) an "underrated" name.

California State Teachers Retirement System lifted its stake in KLA Corporation (NASDAQ:KLAC – Free Report) by 298,176.3% during the second quarter, according to its most recent disclosure with the Securities & Exchange Commission. The fund owned 599,111,883 shares of the semiconductor company’s stock after buying an additional 598,911,025 shares during the quarter. California State Teachers Retirement System owned approximately 45.85% of KLA worth $180,758,046,000 as of its most recent SEC filing.

Several other hedge funds and other institutional investors have also recently bought and sold shares of the stock. Wellington Management Group LLP raised its position in KLA by 928.9% during the second quarter. Wellington Management Group LLP now owns 14,821,622 shares of the semiconductor company’s stock valued at $4,471,832,000 after acquiring an additional 13,381,153 shares in the last quarter. Bank of New York Mellon Corp acquired a new position in KLA in the second quarter valued at approximately $2,522,430,000. NEOS Investment Management LLC boosted its position in KLA by 987.0% in the 2nd quarter. NEOS Investment Management LLC now owns 979,371 shares of the semiconductor company’s stock worth $295,486,000 after purchasing an additional 889,269 shares in the last quarter. Railway Pension Investments Ltd boosted its position in KLA by 960.4% in the 2nd quarter. Railway Pension Investments Ltd now owns 926,652 shares of the semiconductor company’s stock worth $279,580,000 after purchasing an additional 839,265 shares in the last quarter. Finally, Handelsbanken Fonder AB grew its stake in shares of KLA by 978.2% during the 2nd quarter. Handelsbanken Fonder AB now owns 858,984 shares of the semiconductor company’s stock worth $259,164,000 after purchasing an additional 779,317 shares during the period. 86.65% of the stock is owned by institutional investors and hedge funds.

Insider Transactions at KLA In other KLA news, CEO Richard P. Wallace sold 87,568 shares of the stock in a transaction that occurred on Tuesday, August 11th. The stock was sold at an average price of $198.95, for a total transaction of $17,421,653.60. Following the completion of the transaction, the chief executive officer owned 778,944 shares of the company’s stock, valued at $154,970,908.80. This represents a 10.11% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, CAO Virendra Kirloskar sold 4,504 shares of the stock in a transaction that occurred on Wednesday, August 5th. The shares were sold at an average price of $195.50, for a total value of $880,532.00. Following the transaction, the chief accounting officer directly owned 7,972 shares of the company’s stock, valued at $1,558,526. The trade was a 36.10% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold a total of 258,533 shares of company stock worth $55,977,470 in the last three months. 91.48% of the stock is owned by corporate insiders.

KLA Price Performance Shares of NASDAQ KLAC opened at $185.60 on Monday. The firm has a market cap of $242.50 billion, a PE ratio of 50.61, a PEG ratio of 1.65 and a beta of 1.45. The firm has a fifty day moving average of $205.50 and a 200 day moving average of $188.93. The company has a debt-to-equity ratio of 0.93, a quick ratio of 2.03 and a current ratio of 2.88. KLA Corporation has a one year low of $87.83 and a one year high of $307.37. KLA (NASDAQ:KLAC – Get Free Report) last posted its quarterly earnings data on Tuesday, July 28th. The semiconductor company reported $1.05 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.00 by $0.05. KLA had a net margin of 35.57% and a return on equity of 87.66%. The business had revenue of $3.66 billion for the quarter, compared to the consensus estimate of $3.61 billion. During the same period last year, the firm posted $0.94 earnings per share. The company’s revenue was up 15.2% compared to the same quarter last year. KLA has set its Q1 2027 guidance at 1.060-1.260 EPS. As a group, research analysts predict that KLA Corporation will post 5.42 EPS for the current fiscal year.

KLA Increases Dividend The business also recently declared a quarterly dividend, which was paid on Tuesday, September 1st. Investors of record on Monday, August 17th were paid a $0.23 dividend. The ex-dividend date of this dividend was Monday, August 17th. This represents a $0.92 dividend on an annualized basis and a yield of 0.5%. This is a boost from KLA’s previous quarterly dividend of $0.23. KLA’s dividend payout ratio is 25.07%.

Analyst Ratings Changes Several equities analysts have recently weighed in on the stock. Zacks Research raised shares of KLA from a “hold” rating to a “strong-buy” rating in a report on Thursday, July 30th. Weiss Ratings restated a “buy (b-)” rating on shares of KLA in a research report on Friday, July 31st. Morgan Stanley reaffirmed an “overweight” rating and issued a $253.00 price objective on shares of KLA in a report on Wednesday, July 29th. UBS Group decreased their price objective on shares of KLA from $215.00 to $200.00 and set a “neutral” rating for the company in a research report on Tuesday, September 1st. Finally, Citigroup reissued a “buy” rating on shares of KLA in a research note on Wednesday, June 17th. One equities research analyst has rated the stock with a Strong Buy rating, nineteen have given a Buy rating and nine have given a Hold rating to the company’s stock. According to MarketBeat, the stock has an average rating of “Moderate Buy” and a consensus target price of $222.22.

View Our Latest Report on KLA

KLA Profile (Free Report)

KLA is a provider of process control and yield management solutions for the semiconductor and related microelectronics industries. The company designs and manufactures equipment, software and services used by chipmakers to analyze and control manufacturing processes, detect defects, measure critical dimensions and improve yield across wafer fabrication, photomask and packaging operations. KLA’s offerings are aimed at enabling production of advanced logic, memory, and specialty devices at progressively smaller technology nodes and more complex package structures.

Its product portfolio includes optical and e-beam inspection systems, metrology tools for critical dimension and film measurement, mask and reticle inspection platforms, as well as enterprise software and data analytics that aggregate process data and drive automated process control.

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KLA Corporation is rated 'Buy' after a sharp selloff, with fundamentals and 2027 outlook improving despite high market expectations. KLAC delivered record Q4 revenue of $3.66B (+15.2% Y/Y) and strong free cash flow, supporting robust buybacks and dividend growth. Management projects 2027 as an inflection year, driven by 1D DRAM/1.4nm process intensity and easing memory cost headwinds.

KLA is uniquely positioned to benefit from rising chip complexity, driving demand for advanced inspection and process control solutions. KLAC's embedded workflows, dominant market share, and expanding packaging/service revenues reinforce its technological moat and recurring revenue base. I model fiscal 2027 revenue at $16.3B, gross margin at 62.2%, and EPS at $4.75, with growth driven by AI, packaging, and service expansion.

A month has gone by since the last earnings report for KLA (KLAC - Free Report) . Shares have added about 8% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is KLA due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.

KLAC Q4 Earnings Beat on AI Demand, Revenues Increase Y/YKLA reported fiscal fourth-quarter 2026 non-GAAP earnings of $1.05 per share, up 11.7% year over year, and beat the Zacks Consensus Estimate by 5%.

Revenues increased 15.2% year over year to $3.66 billion and beat the consensus mark by 1.32%. Results benefited from AI infrastructure investment, leading-edge foundry/logic demand and rising process control intensity. Advanced packaging process control revenues are now expected to reach about $1.1 billion in calendar 2026.

KLAC Segment Growth Remains Broad-BasedSemiconductor Process Control revenues were $3.26 billion, accounting for 89% of revenues. The segment grew 13% year over year and 6% sequentially, supported by demand for inspection, metrology and related services across advanced logic, memory and packaging applications.

Specialty Semiconductor Process revenues rose 13% year over year to $160 million but declined 3% sequentially.

PCB and Component Inspection revenues surged 56.5% year over year and 44% sequentially to $241.1 million, reflecting stronger demand tied to high-performance computing packages and integration.

KLA Product Mix Highlights Patterning MomentumWafer Inspection remained the largest product category, generating $1.78 billion, or 49% of revenues. Sales increased 1% year over year and 2% sequentially.

Patterning revenues jumped 61% year over year and 18% sequentially to $728 million, representing 20% of the top line.

Services revenues advanced 17% year over year and 6% sequentially to $820 million, and accounted for 22% of revenues. Management noted that customers are running tools at high utilization, while the growing installed base and contract-heavy service model support visibility. About 80% of service revenues are contract-based.

KLAC End Markets Reflect Logic LeadershipFoundry and logic represented 79% of Semiconductor Process Control systems revenues to semiconductor customers. Memory accounted for the remaining 21%, reflecting demand for high-bandwidth memory and increasingly complex DRAM manufacturing processes.

Geographically, Taiwan generated 31% of total revenues, followed by China at 26% and North America at 18%. Korea contributed 10%, Japan 6%, Europe 5% and the Rest of Asia 4%.

KLA Margins Expand With Operating LeverageThe non-GAAP gross margin was 62.4%, at the upper end of guidance. A favorable service mix and manufacturing scale offset higher memory component costs and tariff pressures. Non-GAAP operating margin reached 43.7%, while incremental operating margin was 59%.

Non-GAAP operating expenses totaled $682 million, including $399 million in research and development (up 13% year over year) and $291.5 million in selling, general and administrative expenses (up 11% year over year).

KLAC Cash Flow Supports Shareholder ReturnsKLAC ended the quarter with $4.90 billion in cash, cash equivalents and marketable securities and $5.89 billion in debt.

Cash flow from operations was $906 million, while free cash flow totaled $817 million. The company returned $876 million to shareholders during the quarter, comprising $571 million in share repurchases and $305 million in dividends.

Over the past 12 months, capital returns totaled $3.3 billion, while the free cash flow margin was 28%.

KLA Issues Strong First-Quarter OutlookFor the first quarter of fiscal 2027, KLA expects revenues of $4 billion (plus or minus $200 million). Non-GAAP diluted earnings are projected at $1.16 per share (plus or minus 10 cents), while non-GAAP gross margin is forecast at 62.5% (plus or minus 1 percentage point).

Foundry/logic is expected to account for about 73% of Semiconductor Process Control systems revenues to semiconductor customers, with memory at roughly 27%. Within memory, DRAM is projected at about 90% and NAND at 10%. Non-GAAP operating expenses are anticipated to be approximately $690 million.

KLA expects second-half calendar 2026 revenues to rise about 20% from the first half as supply capacity improves. Management also raised its calendar 2026 wafer fabrication equipment market outlook, including advanced packaging, to the low-$150 billion range and expects significant growth to continue in calendar 2027.

How Have Estimates Been Moving Since Then?Since the earnings release, investors have witnessed a upward trend in estimates revision.

VGM ScoresAt this time, KLA has a subpar Growth Score of D, a score with the same score on the momentum front. Following the exact same course, the stock has a score of D on the value side, putting it in the bottom 40% for value investors.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise KLA has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Bank of New York Mellon Corp purchased a new position in KLA Corporation (NASDAQ:KLAC – Free Report) during the 2nd quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The firm purchased 8,360,447 shares of the semiconductor company’s stock, valued at approximately $2,522,430,000. Bank of New York Mellon Corp owned 0.64% of KLA at the end of the most recent reporting period.

A number of other institutional investors and hedge funds also recently added to or reduced their stakes in the stock. McIlrath & Eck LLC grew its stake in KLA by 6.8% in the 1st quarter. McIlrath & Eck LLC now owns 94 shares of the semiconductor company’s stock worth $139,000 after acquiring an additional 6 shares in the last quarter. Motco increased its holdings in KLA by 1.8% during the 4th quarter. Motco now owns 405 shares of the semiconductor company’s stock worth $492,000 after purchasing an additional 7 shares during the period. Nemes Rush Group LLC increased its holdings in KLA by 17.1% during the 4th quarter. Nemes Rush Group LLC now owns 48 shares of the semiconductor company’s stock worth $58,000 after purchasing an additional 7 shares during the period. SouthState Bank Corp raised its position in KLA by 6.7% during the 4th quarter. SouthState Bank Corp now owns 111 shares of the semiconductor company’s stock valued at $135,000 after purchasing an additional 7 shares in the last quarter. Finally, West Michigan Advisors LLC raised its position in KLA by 2.7% during the 4th quarter. West Michigan Advisors LLC now owns 305 shares of the semiconductor company’s stock valued at $371,000 after purchasing an additional 8 shares in the last quarter. Institutional investors own 86.65% of the company’s stock.

Insider Buying and Selling at KLA In other news, CFO Bren D. Higgins sold 27,701 shares of the firm’s stock in a transaction on Thursday, July 2nd. The stock was sold at an average price of $265.69, for a total value of $7,359,878.69. Following the completion of the sale, the chief financial officer owned 263,472 shares of the company’s stock, valued at $70,001,875.68. This trade represents a 9.51% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this hyperlink. Also, EVP Mary Beth Wilkinson sold 14,392 shares of the business’s stock in a transaction on Wednesday, July 1st. The stock was sold at an average price of $285.30, for a total value of $4,106,037.60. Following the transaction, the executive vice president owned 53,367 shares in the company, valued at approximately $15,225,605.10. This trade represents a 21.24% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last 90 days, insiders sold 258,533 shares of company stock valued at $55,977,470. Corporate insiders own 91.48% of the company’s stock.

Analysts Set New Price Targets A number of research firms have recently issued reports on KLAC. Susquehanna set a $215.00 price target on KLA and gave the stock a “neutral” rating in a research report on Wednesday, July 29th. The Goldman Sachs Group reaffirmed a “neutral” rating and issued a $230.00 price objective on shares of KLA in a research note on Tuesday, July 28th. Barclays reiterated an “overweight” rating and set a $225.00 target price on shares of KLA in a report on Monday, July 20th. Morgan Stanley reissued an “overweight” rating and set a $253.00 target price on shares of KLA in a research report on Wednesday, July 29th. Finally, Citigroup restated a “buy” rating on shares of KLA in a report on Wednesday, June 17th. One equities research analyst has rated the stock with a Strong Buy rating, nineteen have given a Buy rating and nine have issued a Hold rating to the company’s stock. According to MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and a consensus target price of $223.70. View Our Latest Stock Report on KLA

KLA Price Performance Shares of KLAC stock opened at $185.86 on Friday. The stock’s 50-day moving average is $221.46 and its 200 day moving average is $186.03. KLA Corporation has a 1-year low of $83.22 and a 1-year high of $307.37. The company has a debt-to-equity ratio of 0.93, a current ratio of 2.88 and a quick ratio of 2.03. The company has a market cap of $242.84 billion, a P/E ratio of 50.68, a PEG ratio of 1.44 and a beta of 1.45.

KLA (NASDAQ:KLAC – Get Free Report) last announced its earnings results on Tuesday, July 28th. The semiconductor company reported $1.05 EPS for the quarter, topping analysts’ consensus estimates of $1.00 by $0.05. The business had revenue of $3.66 billion during the quarter, compared to the consensus estimate of $3.61 billion. KLA had a net margin of 35.57% and a return on equity of 87.66%. The firm’s revenue was up 15.2% on a year-over-year basis. During the same period in the previous year, the company posted $0.94 earnings per share. KLA has set its Q1 2027 guidance at 1.060-1.260 EPS. Research analysts predict that KLA Corporation will post 5.42 earnings per share for the current fiscal year.

KLA Increases Dividend The company also recently declared a quarterly dividend, which will be paid on Tuesday, September 1st. Shareholders of record on Monday, August 17th will be issued a $0.23 dividend. This is an increase from KLA’s previous quarterly dividend of $0.23. This represents a $0.92 annualized dividend and a yield of 0.5%. The ex-dividend date of this dividend is Monday, August 17th. KLA’s dividend payout ratio is presently 25.07%.

KLA Company Profile (Free Report)

KLA is a provider of process control and yield management solutions for the semiconductor and related microelectronics industries. The company designs and manufactures equipment, software and services used by chipmakers to analyze and control manufacturing processes, detect defects, measure critical dimensions and improve yield across wafer fabrication, photomask and packaging operations. KLA’s offerings are aimed at enabling production of advanced logic, memory, and specialty devices at progressively smaller technology nodes and more complex package structures.

Its product portfolio includes optical and e-beam inspection systems, metrology tools for critical dimension and film measurement, mask and reticle inspection platforms, as well as enterprise software and data analytics that aggregate process data and drive automated process control.

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Abacus FCF Advisors LLC purchased a new stake in KLA Corporation (NASDAQ:KLAC – Free Report) during the 2nd quarter, according to the company in its most recent disclosure with the Securities & Exchange Commission. The institutional investor purchased 68,818 shares of the semiconductor company’s stock, valued at approximately $20,763,000. KLA makes up about 3.8% of Abacus FCF Advisors LLC’s investment portfolio, making the stock its 3rd largest holding.

Several other large investors have also modified their holdings of the business. Bank of New York Mellon Corp acquired a new stake in shares of KLA during the second quarter valued at $2,522,430,000. Handelsbanken Fonder AB boosted its position in KLA by 978.2% during the second quarter. Handelsbanken Fonder AB now owns 858,984 shares of the semiconductor company’s stock worth $259,164,000 after acquiring an additional 779,317 shares during the last quarter. Wedge Capital Management L L P NC grew its stake in KLA by 781.5% in the 2nd quarter. Wedge Capital Management L L P NC now owns 359,277 shares of the semiconductor company’s stock worth $108,397,000 after acquiring an additional 318,520 shares during the period. Bessemer Group Inc. grew its stake in KLA by 0.7% in the 1st quarter. Bessemer Group Inc. now owns 180,279 shares of the semiconductor company’s stock worth $265,444,000 after acquiring an additional 1,291 shares during the period. Finally, Clal Insurance Enterprises Holdings Ltd raised its holdings in KLA by 151.2% in the 1st quarter. Clal Insurance Enterprises Holdings Ltd now owns 116,292 shares of the semiconductor company’s stock valued at $171,230,000 after acquiring an additional 70,000 shares during the last quarter. 86.65% of the stock is currently owned by institutional investors and hedge funds.

KLA News Roundup Here are the key news stories impacting KLA this week:

Positive Sentiment: Wall Street analysts remain broadly optimistic on KLA, with Wells Fargo maintaining an “Overweight” rating. The company’s latest quarterly results also exceeded consensus estimates, with revenue of $3.66 billion and earnings of $1.05 per share. Is KLA a Buy as Wall Street Analysts Look Optimistic? Positive Sentiment: Institutional interest was mixed but included significant second-quarter additions by Invesco, Norges Bank, Capital International Investors and JPMorgan, potentially providing longer-term support for KLAC. KLA Falls as Investors Digest Guidance and Sector Pressure Insider Buying and Selling at KLA In related news, EVP Mary Beth Wilkinson sold 13,802 shares of the firm’s stock in a transaction on Wednesday, August 5th. The shares were sold at an average price of $195.50, for a total transaction of $2,698,291.00. Following the completion of the sale, the executive vice president directly owned 22,110 shares of the company’s stock, valued at approximately $4,322,505. This trade represents a 38.43% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, CFO Bren D. Higgins sold 27,701 shares of the business’s stock in a transaction dated Thursday, July 2nd. The stock was sold at an average price of $265.69, for a total value of $7,359,878.69. Following the completion of the transaction, the chief financial officer owned 263,472 shares in the company, valued at approximately $70,001,875.68. This trade represents a 9.51% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last 90 days, insiders sold 258,533 shares of company stock worth $55,977,470. 91.48% of the stock is currently owned by insiders. Analyst Ratings Changes A number of equities research analysts have recently commented on KLAC shares. New Street Research lifted their price objective on KLA from $146.00 to $177.00 and gave the company a “neutral” rating in a research report on Wednesday, April 29th. Scotiabank set a $200.00 target price on KLA in a research report on Wednesday, June 10th. Oppenheimer reissued an “outperform” rating and issued a $260.00 price target (up from $200.00) on shares of KLA in a research note on Thursday, July 16th. Stifel Nicolaus set a $250.00 price target on KLA and gave the company a “buy” rating in a report on Wednesday, July 29th. Finally, Cantor Fitzgerald restated an “overweight” rating and set a $325.00 price objective on shares of KLA in a report on Wednesday, July 29th. One research analyst has rated the stock with a Strong Buy rating, nineteen have given a Buy rating and nine have issued a Hold rating to the company’s stock. Based on data from MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and an average target price of $223.70.

Check Out Our Latest Stock Analysis on KLAC

KLA Stock Performance Shares of KLAC stock opened at $187.27 on Thursday. The company has a current ratio of 2.88, a quick ratio of 2.03 and a debt-to-equity ratio of 0.93. The company has a market cap of $244.68 billion, a PE ratio of 51.07, a P/E/G ratio of 1.50 and a beta of 1.45. The company’s fifty day simple moving average is $222.57 and its 200-day simple moving average is $185.73. KLA Corporation has a 52 week low of $83.22 and a 52 week high of $307.37.

KLA (NASDAQ:KLAC – Get Free Report) last announced its quarterly earnings results on Tuesday, July 28th. The semiconductor company reported $1.05 earnings per share for the quarter, topping analysts’ consensus estimates of $1.00 by $0.05. KLA had a net margin of 35.57% and a return on equity of 87.66%. The firm had revenue of $3.66 billion during the quarter, compared to analysts’ expectations of $3.61 billion. During the same period in the prior year, the company earned $0.94 EPS. The firm’s revenue was up 15.2% on a year-over-year basis. KLA has set its Q1 2027 guidance at 1.060-1.260 EPS. As a group, equities research analysts anticipate that KLA Corporation will post 5.42 EPS for the current year.

KLA Increases Dividend The company also recently announced a quarterly dividend, which will be paid on Tuesday, September 1st. Stockholders of record on Monday, August 17th will be paid a $0.23 dividend. This represents a $0.92 annualized dividend and a dividend yield of 0.5%. This is a boost from KLA’s previous quarterly dividend of $0.23. The ex-dividend date is Monday, August 17th. KLA’s payout ratio is currently 25.07%.

About KLA (Free Report)

KLA is a provider of process control and yield management solutions for the semiconductor and related microelectronics industries. The company designs and manufactures equipment, software and services used by chipmakers to analyze and control manufacturing processes, detect defects, measure critical dimensions and improve yield across wafer fabrication, photomask and packaging operations. KLA’s offerings are aimed at enabling production of advanced logic, memory, and specialty devices at progressively smaller technology nodes and more complex package structures.

Its product portfolio includes optical and e-beam inspection systems, metrology tools for critical dimension and film measurement, mask and reticle inspection platforms, as well as enterprise software and data analytics that aggregate process data and drive automated process control.

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Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?

Let's take a look at what these Wall Street heavyweights have to say about KLA (KLAC - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.

KLA currently has an average brokerage recommendation (ABR) of 1.73, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 28 brokerage firms. An ABR of 1.73 approximates between Strong Buy and Buy.

Of the 28 recommendations that derive the current ABR, 16 are Strong Buy and three are Buy. Strong Buy and Buy respectively account for 57.1% and 10.7% of all recommendations.

Brokerage Recommendation Trends for KLAC

Check price target & stock forecast for KLA here>>>

While the ABR calls for buying KLA, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.

Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.

This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.

Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.

Zacks Rank Should Not Be Confused With ABRAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.

The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.

It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.

In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.

Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.

There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.

Should You Invest in KLAC?Looking at the earnings estimate revisions for KLA, the Zacks Consensus Estimate for the current year has increased 7.1% over the past month to $5.43.

Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.

The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for KLA. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Therefore, the Buy-equivalent ABR for KLA may serve as a useful guide for investors.

On August 17, 2026, we conducted a DCF analysis for KLA Corp (KLAC), a company that has shown significant price performance over the past year. The stock has ap

KLA Corporation is upgraded to a buy as robust semiconductor demand and strong Q1 guidance outweigh recent margin contraction. Q4 revenue grew 15% YoY but gross margin declined as a signal of potential costs pressures. Q1 FY2027 guidance projects 25% revenue growth and stable gross margin, signaling accelerating business momentum and improved profitability.

Investors interested in Electronics - Miscellaneous Products stocks are likely familiar with Mistras (MG - Free Report) and KLA (KLAC - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Both Mistras and KLA have a Zacks Rank of #2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

MG currently has a forward P/E ratio of 16.46, while KLAC has a forward P/E of 38.38. We also note that MG has a PEG ratio of 1.03. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. KLAC currently has a PEG ratio of 1.60.

Another notable valuation metric for MG is its P/B ratio of 2.38. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, KLAC has a P/B of 42.84.

These are just a few of the metrics contributing to MG's Value grade of A and KLAC's Value grade of D.

Both MG and KLAC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MG is the superior value option right now.

An updated edition of the June 18, 2026, article.

Artificial Intelligence (AI) is reshaping digital transformation by enabling systems to process massive volumes of data, recognize complex patterns, and generate intelligent insights and decisions. Advances in generative AI, agentic AI, multimodal models, and high-performance computing — supported by increasingly powerful GPUs and Tensor Processing Units (TPUs) — are accelerating AI adoption across industries. Applications ranging from conversational assistants and medical diagnostics to fraud detection and autonomous systems are helping organizations improve productivity, strengthen decision-making, increase operational agility, and unlock new avenues for innovation and growth.

Per Gartner, global AI spending is expected to hit $2.596 trillion in 2026, indicating 47% growth over 2025. IDC projects AI infrastructure spending to reach $487 billion in 2026 and is expected to hit $1 trillion in 2029, seeing a CAGR of 31% between the 2025-2029 time frame. U.S. tech giants, including Microsoft (MSFT - Free Report) , Alphabet, Amazon (AMZN - Free Report) and Meta Platforms (META - Free Report) , have been at the forefront of bringing remarkable advances to AI technology, well supported by powerful AI chips and custom accelerators from NVIDIA, Advanced Micro Devices (AMD - Free Report) , and Broadcom. Growing demand for complex AI chips bodes well for KLA (KLAC - Free Report) due to the growing requirement for greater inspection and intense process control.

Enterprise-focused AI agents continue to gain traction across productivity, software development, customer service and business automation applications. Latest AI model releases are focusing on improved reasoning, coding assistance, multimodal understanding and safety. However, Chinese AI model developers like Alibaba are challenging U.S. tech giants by launching much cheaper models with almost the same performance.

We believe that the rapid deployment of AI technology and huge spending on its development efforts offer significant growth opportunities for investors. Our Artificial Intelligence Screen is an invaluable source for identifying AI stocks with massive growth prospects.

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3 AI Stocks to Buy Right NowAmazon is benefiting from AI both directly through its cloud arm Amazon Web Services (AWS) and indirectly because AI workloads stimulate consumption of its traditional cloud infrastructure. This Zacks Rank #1 (Strong Buy) stock is benefiting from strong AI spending. You can see the complete list of today’s Zacks #1 Rank stocks here.

AI applications require storage, databases and CPUs in addition to accelerators. Post-training, reinforcement learning and agentic tool use often run on CPUs, while AI applications also need storage and vector databases. Consequently, as customers increase AI spending, Amazon sees a corresponding increase in AWS core consumption.

Amazon is also monetizing virtually every layer of the AI infrastructure stack. At the silicon layer, the company’s Trainium AI accelerators and Graviton CPUs have become sizable businesses. Amazon’s overall chip business has surpassed a $25 billion annual revenue run rate. Anthropic and OpenAI have made multiyear, multi-gigawatt Trainium commitments, while additional startups and enterprises are adopting the chips.

AI is also improving Amazon’s non-AWS businesses. Alexa for Shopping has been used by more than 350 million customers over the past year while active users nearly doubled in the second quarter of 2026 and interactions increased more than fivefold year over year.

AMD is one of the more direct beneficiaries of rising AI compute demand. In the second quarter of 2026, AMD’s Data Center revenues increased 107% year over year to a record $6.7 billion, representing 58% of company revenues versus 42% in the year-ago quarter. Growth was driven by both EPYC server CPUs and Instinct AI accelerators, illustrating that AI demand is expanding AMD’s opportunity beyond GPUs alone. Management characterized the industry as being in the early stages of a multiyear AI adoption cycle that is creating demand for substantially more compute.

AMD’s Instinct accelerator franchise is driving top-line growth. Data Center AI revenues more than doubled year over year as customers broadened deployments of MI355x accelerators across training and inference. This Zacks Rank #1 company is now moving toward complete rack-scale AI systems with Helios, which combines MI450 GPUs, EPYC Venice CPUs, Pensando networking and ROCm software. AMD said Helios can deliver up to 15% greater inference throughput at the same rack power and up to 30% more tokens per dollar than competing solutions, with customer demand tracking ahead of its initial forecast.

AMD is also securing large, multiyear deployments with leading AI companies including OpenAI, Meta, Anthropic and Microsoft.

Another Zacks Rank #1 company, KLA, sells the inspection, metrology and process-control equipment semiconductor manufacturers need to produce increasingly complex AI chips at acceptable yields. This is driving up top-line growth as KLA generated record fourth-quarter fiscal 2026 revenues of $3.66 billion. Management specifically cited accelerating AI infrastructure investment, leading-edge foundry/logic spending and increasing process-control intensity in memory and advanced packaging as major drivers.

AI chips require more advanced logic, high-bandwidth memory (HBM) and increasingly sophisticated packaging. Each of these makes semiconductor manufacturing more difficult and increases the economic importance of detecting defects and improving yields. KLA said AI infrastructure requires more advanced logic and memory, new complex manufacturing and packaging flows, and additional KLA systems and services to ramp and sustain high-volume production.

HBM and advanced packaging are particularly important. KLA expects its advanced-packaging process-control systems revenues to reach roughly $1.1 billion in calendar 2026, up more than 70% year over year, nearly twice the growth rate of the broader advanced-packaging market.

KLA Corporation (NASDAQ:KLAC | KLAC Price Prediction) trades at $182.82, while the average Wall Street price target sits at $230.85, an implied upside of roughly 26%. Cantor Fitzgerald’s $325 call implies about 78% upside from here.

KLA dominates semiconductor process control, the inspection and metrology tools that catch defects on wafers as chipmakers push into 2nm logic, high-bandwidth memory stacking, and advanced packaging. Wall Street has treated it as a purebred AI-infrastructure play, which is why the recent unwind has been jarring.

With the stock trading well below consensus and further below the Street high, the question is whether the market has correctly repriced KLA’s China risk or overshot on a name whose fundamentals remain intact.

A Beat That Sparked A Selloff KLA delivered non-GAAP EPS of $1.05 versus a $0.9987 estimate, a 5.14% beat, on revenue of $3.66 billion, up 15.21% year over year and the fifth straight quarterly beat. Shares cratered 10.8% on the report and have kept sliding, down 31.32% over the last month and roughly 40% off the $307.37 52-week high.

The Q1 FY2027 revenue guide of $4.0 billion plus or minus $200 million came in below the whisper number, and management flagged evolving U.S. Bureau of Industry and Security rules on China sales as a live risk. China contributed $4.04 billion of FY2026 revenue. A 4% drop in the Philadelphia Semiconductor Index and a valuation running at 50x trailing earnings amplified the selloff.

Why The Sell-Side Still Loves It Analysts have not blinked. The consensus rating spans 5 Strong Buy, 13 Buy, 10 Hold, and 1 Sell, and post-earnings revisions skewed higher. JPMorgan lifted its target to $238 from $200 and named KLA its top semi-cap pick. Jefferies raised to $210, citing a backlog inflection. Zacks upgraded to Strong-Buy.

Cantor Fitzgerald raised its target to $325 from $250, arguing that KLA’s optical and electron-beam inspection tools become indispensable as chipmakers shrink to 2nm and 3nm logic and stack more HBM layers. Defect detection is now the primary bottleneck for yield in gate-all-around and advanced packaging, giving KLA pricing power and outsized capital-intensity share versus broader wafer-fab-equipment peers.

CEO Rick Wallace said momentum is “accelerating in the second half of calendar 2026 and continuing through 2027,” with advanced packaging revenue projected to grow more than 70% in 2026. Analysts are staking the target on a 12-month recovery back through the September 2026 guide and into calendar 2027.

The Whole Group Got Hit, But Not Equally Applied Materials (NASDAQ:AMAT) trades at $507.67, down 22.01% over the past month. The consensus target of $627.66 implies about 24% upside. Ratings tilt heavily bullish with 28 Buy calls against limited Sells.

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Lam Research (NASDAQ:LRCX) sits at $293.02, off 25.11% in a month despite an 8.1% earnings beat. The $368.13 consensus target implies roughly 26% upside, with 29 of 35 analysts at Buy or better.

Onto Innovation (NYSE:ONTO), the smaller process-control peer, trades at $258.58 after a 26.41% monthly decline. The $369.60 consensus target implies about 43% upside, the widest consensus gap in the group. Ratings are a clean 10 Buys with zero Holds or Sells.

The Numbers Behind The Setup KLA trades at $182.82 against a $230.85 consensus target from 29 analysts, implying roughly 26% upside. Cantor’s $325 Street high stretches that to about 78%. Trailing P/E is 50, and forward P/E is 34. Analyst breakdown:

Strong Buy: 5 Buy: 13 Hold: 10 Sell: 1 KLA is down 31.32% over the last month, while the S&P 500 is up 0.17% in the same window. Year to date, KLA is up 50.85% versus 9.55% for the S&P 500, so this is a correction inside a strong year.

My Take: A Cyclical Wobble In A Structural Story The bull case rests on the AI capex cycle extending into 2027, defect-control intensity rising with 2nm and HBM, and the China revenue hit getting absorbed rather than compounded. Management’s guide to $4.0 billion in Q1 FY2027 revenue would mark meaningful sequential acceleration. Free cash flow of $817 million plus $571 million in quarterly buybacks funds patience.

The bear case strengthens if BIS tightens further on China, if hyperscaler AI spend cools, or if the market decides a 50x trailing multiple is too rich for a cyclical equipment maker. Cash flow fell 22.19% year over year in the quarter, and insider activity skews to selling.

The selloff looks more like sentiment resetting than fundamentals cracking. The consensus 26% gap looks defensible even if Cantor’s 78% call proves aspirational.

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Contact [email protected] for any questions or corrections.

Here are three stocks with buy rank and strong momentum characteristics for investors to consider today, July 31st:

Fortrea Holdings Inc. (FTRE - Free Report) : This company, which is a provider of clinical development and patient access solutions to the life sciences industry, has a Zacks Rank #1(Strong Buy), and witnessed the Zacks Consensus Estimate for its current year earnings increasing 7.5% over the last 60 days.

Fortrea Holdings' shares gained 56.6% over the last three month compared with the S&P 500’s gain of 2.9%. The company possesses a Momentum Score of A.

ASML Holding (ASML - Free Report) : This company, which is a world leader in the manufacture of advanced technology systems for the semiconductor industry, has a Zacks Rank #1, and witnessed the Zacks Consensus Estimate for its current year earnings increasing 20.4% over the last 60 days.

ASML Holding's shares gained 15.8% over the last three month compared with the S&P 500’s gain of 2.9%. The company possesses a Momentum Score of A.

KLA (KLAC - Free Report) : This company, which is an original equipment manufacturer (OEM) of process diagnostics and control (PDC) equipment and yield management solutions required for the fabrication of semiconductor integrated circuits (ICs) or chips, has a Zacks Rank #1, and witnessed the Zacks Consensus Estimate for its current year earnings increasing 8% over the last 60 days.

KLA's shares gained 4.6% over the last three month compared with the S&P 500’s gain of 2.9%. The company possesses a Momentum Score of A.

See the full list of top ranked stocks here

Learn more about the Momentum score and how it is calculated here.

Key Takeaways KLA expects advanced packaging process control revenue to reach $1.1B in 2026, up more than 70%.AI chiplets, 2.5D/3D integration and hybrid bonding are increasing process control intensity.KLA expects revenue growth to accelerate in the second half of 2026 and continue into 2027. KLA (KLAC - Free Report) is benefiting from the rapid adoption of advanced packaging, which has become a key enabler of AI infrastructure. As AI processors become more complex, the requirement for advanced packaging technologies such as chiplets, 2.5D/3D integration and hybrid bonding is increasing rapidly. These technologies require significantly higher process control intensity, creating strong demand for KLA’s inspection, metrology and yield-management solutions.

Advanced packaging roadmaps are increasingly adopting sophisticated wafer front-end manufacturing techniques, requiring more front-end process control capabilities, according to KLA management. Driven by the industry’s most comprehensive process control portfolio, KLA expects its Advanced Packaging process control systems revenue to reach approximately $1.1 billion in calendar 2026. This represents more than 70% year-over-year growth, well above KLAC’s previous expectation of high-50% growth and nearly twice the growth rate of the advanced packaging market.

Beyond its core Semiconductor Process Control business, advanced packaging is also driving growth in KLA’s Specialty Process, PCB and Component Inspection businesses. High-performance computing packages and increasingly complex AI chip packaging are boosting demand for these products. KLA expects these combined businesses to grow more than 25% in calendar 2026, reflecting the benefits of the Orbotech acquisition.

KLA sees advanced packaging as a long-term growth engine. The company raised its outlook for the wafer equipment market, including advanced packaging, to approximately the low-$150 billion range in calendar 2026 (up from prior expectation of more than $140 billion) and continues to expect significant industry growth in calendar 2027, driven by investments across leading-edge logic, DRAM, HBM, NAND and advanced packaging capacity. KLAC expects technologies such as hybrid bonding, together with AI computing, HBM and EUV adoption, to increase process control intensity across the semiconductor ecosystem. This will support accelerating revenue growth in the second half of 2026 and continued momentum into 2027.

Tough Competition Hurts KLAC’s ProspectsKLAC is facing stiff competition from the likes of Onto Innovation (ONTO - Free Report) and Applied Materials (AMAT - Free Report) , both of which are well known for their advanced packaging process control offerings.

Onto Innovation’s expanding inspection and metrology portfolio for AI-driven packaging applications is a key catalyst. ONTO expects advanced packaging revenues to grow more than 50% in 2026, supported by qualification of its Dragonfly G5 inspection platform at a leading 2.5D logic customer, growing adoption of its 3DI metrology systems for shrinking micro-bump inspection and JetStep lithography wins for panel-level packaging. Onto Innovation also highlighted a pipeline of more than 15 applications across over 10 customers, positioning it to gain market share in both existing and new packaging applications.

Applied Materials’ advanced packaging technology portfolio extends beyond process control into deposition, etch, hybrid bonding and packaging integration. AMAT expects advanced packaging revenue to increase more than 50% in calendar 2026, driven by AI-related demand for high-bandwidth memory (HBM) and 3D chiplet architectures. Applied Materials has invested heavily in hybrid bonding, panel-level packaging, glass substrates and packaging inspection technologies, including the planned NEXX acquisition and X-ray capabilities, while emphasizing leadership in HBM packaging equipment.

KLAC’s Share Price Performance, Valuation & EstimatesKLAC shares have jumped 40% year to date, outperforming the broader Zacks Computer and Technology sector’s return of 8.9%.

KLAC Stock’s Performance
Image Source: Zacks Investment Research

KLA stock is overvalued, with a forward 12-month price/sales of 12.68X compared with the broader sector’s 6.13X. KLAC has a Value Score of F.

KLAC Valuation
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for fiscal 2027 earnings is pegged at $5.07 per share, up 2.5% over the past 30 days, suggesting 34.84% growth from the figure reported in fiscal 2026.
 

KLA currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways KLA's fiscal Q4 earnings rose 11.7% as revenues climbed 15.2% year over year to $3.66 billion.AI infrastructure, advanced logic and rising process control intensity drove broad-based segment growth.KLA expects fiscal Q1 2027 revenues of $4 billion and second-half 2026 sales to rise about 20%. KLA Corporation (KLAC - Free Report) reported fiscal fourth-quarter 2026 non-GAAP earnings of $1.05 per share, up 11.7% year over year, and beat the Zacks Consensus Estimate by 5%.

Revenues increased 15.2% year over year to $3.66 billion and beat the consensus mark by 1.32%. Results benefited from AI infrastructure investment, leading-edge foundry/logic demand and rising process control intensity. Advanced packaging process control revenues are now expected to reach about $1.1 billion in calendar 2026.

KLAC Segment Growth Remains Broad-BasedSemiconductor Process Control revenues were $3.26 billion, accounting for 89% of revenues. The segment grew 13% year over year and 6% sequentially, supported by demand for inspection, metrology and related services across advanced logic, memory and packaging applications.

Specialty Semiconductor Process revenues rose 13% year over year to $160 million but declined 3% sequentially.

PCB and Component Inspection revenues surged 56.5% year over year and 44% sequentially to $241.1 million, reflecting stronger demand tied to high-performance computing packages and integration.

KLA Product Mix Highlights Patterning MomentumWafer Inspection remained the largest product category, generating $1.78 billion, or 49% of revenues. Sales increased 1% year over year and 2% sequentially.

Patterning revenues jumped 61% year over year and 18% sequentially to $728 million, representing 20% of the top line.

Services revenues advanced 17% year over year and 6% sequentially to $820 million, and accounted for 22% of revenues. Management noted that customers are running tools at high utilization, while the growing installed base and contract-heavy service model support visibility. About 80% of service revenues are contract-based.

KLAC End Markets Reflect Logic LeadershipFoundry and logic represented 79% of Semiconductor Process Control systems revenues to semiconductor customers. Memory accounted for the remaining 21%, reflecting demand for high-bandwidth memory and increasingly complex DRAM manufacturing processes.

Geographically, Taiwan generated 31% of total revenues, followed by China at 26% and North America at 18%. Korea contributed 10%, Japan 6%, Europe 5% and the Rest of Asia 4%.

KLA Margins Expand With Operating LeverageThe non-GAAP gross margin was 62.4%, at the upper end of guidance. A favorable service mix and manufacturing scale offset higher memory component costs and tariff pressures. Non-GAAP operating margin reached 43.7%, while incremental operating margin was 59%.

Non-GAAP operating expenses totaled $682 million, including $399 million in research and development (up 13% year over year) and $291.5 million in selling, general and administrative expenses (up 11% year over year).

KLAC Cash Flow Supports Shareholder ReturnsKLAC ended the quarter with $4.90 billion in cash, cash equivalents and marketable securities and $5.89 billion in debt.

Cash flow from operations was $906 million, while free cash flow totaled $817 million. The company returned $876 million to shareholders during the quarter, comprising $571 million in share repurchases and $305 million in dividends.

Over the past 12 months, capital returns totaled $3.3 billion, while the free cash flow margin was 28%.

KLA Issues Strong First-Quarter OutlookFor the first quarter of fiscal 2027, KLA expects revenues of $4 billion (plus or minus $200 million). Non-GAAP diluted earnings are projected at $1.16 per share (plus or minus 10 cents), while non-GAAP gross margin is forecast at 62.5% (plus or minus 1 percentage point).

Foundry/logic is expected to account for about 73% of Semiconductor Process Control systems revenues to semiconductor customers, with memory at roughly 27%. Within memory, DRAM is projected at about 90% and NAND at 10%. Non-GAAP operating expenses are anticipated to be approximately $690 million.

KLA expects second-half calendar 2026 revenues to rise about 20% from the first half as supply capacity improves. Management also raised its calendar 2026 wafer fabrication equipment market outlook, including advanced packaging, to the low-$150 billion range and expects significant growth to continue in calendar 2027.

Zacks Rank & Upcoming Earnings to WatchKLA currently has a Zacks Rank #2 (Buy).

Lumentum (LITE - Free Report) , Arrow Electronics (ARW - Free Report) and HubSpot (HUBS - Free Report) are some better-ranked stocks in the broader Zacks Computer and Technology sector. Each of the three stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Lumentum, Arrow Electronics and HubSpot are expected to report their quarterly results on Aug. 11, Aug. 6 and Aug. 5, respectively. Shares of HubSpot have dropped 40.7%, while Arrow Electronics and Lumentum have jumped 91.8% and 76.8%, year to date, respectively.

Key Takeaways KLAC's Q4 results reflect AI infrastructure investment and rising semiconductor process control demand.KLAC raises 2026 wafer equipment market outlook to low $150B as customer demand strengthens.KLA expects advanced packaging process control revenues of about $1.1B in 2026, up over 70%. KLA Corporation (KLAC - Free Report) published its fourth-quarter fiscal 2026 results, with management highlighting accelerating AI infrastructure investment, stronger semiconductor demand and expanding process control opportunities across advanced manufacturing.

The earnings call focused on improving visibility into customer spending, capacity expansion plans and long-term growth opportunities tied to advanced logic, memory and packaging technologies. Executives also addressed margin trends, supply constraints and industry outlook during analyst discussions.

KLAC Sees AI Expanding Process Control DemandKLA reported fiscal fourth-quarter revenues of $3.66 billion, surpassing the Zacks Consensus Estimate of $3.61 billion. Non-GAAP EPS came in at $1.05, topping the Zacks Consensus Estimate of $1 by 5%.

CEO Richard Wallace said KLA’s fiscal fourth-quarter performance reflected accelerating investment tied to AI infrastructure, leading-edge foundry and logic demand, and increasing process control intensity across memory and advanced packaging. He highlighted the growing complexity of semiconductor designs as a key demand driver.

Wallace noted that AI infrastructure expansion requires more advanced logic, memory and packaging technologies, creating additional opportunities for KLA’s systems and services. He said customer engagement strengthened after the company’s investor event, improving visibility into future demand.

KLA Raises Industry Outlook Through 2027KLA management increased its wafer equipment market outlook for calendar 2026 to the low $150 billion range, up from its prior expectation of more than $140 billion. CFO Bren Higgins said customer demand has strengthened across leading-edge logic, memory and advanced packaging.

Higgins said KLA expects second-half calendar 2026 growth over the first half to be approximately 20%, supported by improving supply availability. He added that the company is positioned for continued sequential growth into calendar 2027.

KLA also pointed to expanding backlog visibility. Higgins said backlog was expected to reach about $12.5 billion, with customer order activity supporting the outlook for future growth.

KLAC Expands Advanced Packaging OpportunityKLA highlighted advanced packaging as an important growth area connected to AI infrastructure. Management raised its expectation for advanced packaging process control systems revenues to approximately $1.1 billion in calendar 2026, representing more than 70% year-over-year growth.

Wallace said adoption of systems originally designed for front-end semiconductor manufacturing has accelerated in advanced packaging applications. He noted that technologies such as hybrid bonding are creating additional demand for process control capabilities.

KLA also reported strength in businesses acquired through Orbotech. Management said specialty process, PCB and component inspection businesses are expected to grow more than 25% in calendar 2026 as high-performance computing drives demand.

KLA Maintains Margin Focus Amid Cost PressuresFiscal fourth-quarter gross margin was 62.4%, supported by favorable service mix and manufacturing scale. However, memory pricing pressures and higher input costs remained headwinds.

KLA expects pricing actions and new product introductions to support gross margin performance over time. The company remains focused on maintaining its long-term incremental margin model.

KLA’s fiscal fourth-quarter operating margin was 43.7%, while operating expenses totaled $682 million. Research and development spending was $399 million, reflecting continued investment in future products.

KLAC Addresses Capacity & Competitive QuestionsDuring Q&A, a JPMorgan analyst asked about the implications of higher wafer equipment spending and the company’s growth outlook. Higgins said the industry setup remains favorable, with broader logic investment, high-bandwidth memory demand and new fabs supporting future opportunities.

A Bank of America analyst questioned competitive pressure in China. Wallace said process control remains difficult to replicate because of technology integration, customer collaboration and KLA’s global applications engineering capabilities.

Management also discussed supply preparation. Higgins said the company is working with suppliers on long-term capacity planning, with some components requiring 12 to 24 months to add capacity.

KLA Prepares for Continued Semiconductor InvestmentKLA entered the next phase of growth focused on supporting customer demand, expanding manufacturing capacity and investing in innovation. Management emphasized that AI-related semiconductor complexity is increasing the strategic importance of process control.

Executives also highlighted capital allocation discipline. The company generated $817 million in free cash flow during the quarter and returned $876 million to its shareholders through dividends and share repurchases.

KLA’s first-quarter fiscal 2027 guidance calls for revenues of $4.0 billion, plus or minus $200 million, with non-GAAP EPS of $1.16, plus or minus $0.10.

KLAC’s Zacks Rank & Style Scores SignalsKLA currently carries Zacks Rank #2 (Buy), indicating a favorable position within the Zacks Rank system based on earnings estimate revisions. The Zacks Rank can change after earnings as analysts update estimates and expectations. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The stock has a Value Score of F, Growth Score of D, Momentum Score of B and VGM Score of D. Zacks Style Scores are designed to complement the Zacks Rank by evaluating value, growth and momentum characteristics, with stronger scores representing more favorable attributes.

Revenue: $3.66 billion, a record high, up 7% sequentially and 15% year-over-year.Non-GAAP Diluted EPS: $1.05, at the upper end of guidance.GAAP Diluted EPS: $1.

For the quarter ended June 2026, KLA (KLAC - Free Report) reported revenue of $3.66 billion, up 15.2% over the same period last year. EPS came in at $1.05, compared to $0.94 in the year-ago quarter.

The reported revenue represents a surprise of +1.32% over the Zacks Consensus Estimate of $3.61 billion. With the consensus EPS estimate being $1.00, the EPS surprise was +5%.

While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.

Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.

Here is how KLA performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

Revenues- Semiconductor Process Control: $3.26 billion versus $3.27 billion estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +13.2% change.Revenues- Specialty Semiconductor Process: $159.7 million versus $159.85 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +12.6% change.Revenues- Service: $820.41 million versus $806.64 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +16.8% change.Revenues- Product: $2.84 billion versus $2.69 billion estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +14.8% change.Revenues- PCB and Component Inspection: $159.7 million versus $175.04 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +3.6% change.View all Key Company Metrics for KLA here>>>

Shares of KLA have returned -27% over the past month versus the Zacks S&P 500 composite's +1.7% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term.

KLA Corporation (KLAC) Q4 2026 Earnings Call Transcript

KLAC stock is moving. Watch the price action here. KLA Q4 Details   KLA reported quarterly earnings of $1.05 per share, which beat the analyst consensus estimate of $1 by 5%, according to Benzinga Pro data.

Quarterly revenue came in at $3.66 billion, which beat the Street estimate of $3.6 billion.

KLA reported the following highlights:

Cash flow from operating activities for the quarter and fiscal year was $906.4 million and $4.14 billion, respectively, and free cash flow was $817.1 million and $3.77 billion, respectively. Capital returns for the quarter and fiscal year were $876.3 million and $3.35 billion, respectively. “KLA’s June quarter results reinforce that the trends driving our growth are strengthening, and we see momentum across our business accelerating in the second half of calendar 2026 and continuing through 2027,” said CEO Rick Wallace.

Looking AheadKLA expects first quarter adjusted EPS of $1.06 to $1.26, versus the $1.14 analyst estimate, and revenue in a range of $3.8 billion to $4.2 billion, versus the $3.92 billion estimate.

KLAC Stock Price Activity: According to data from Benzinga Pro, KLA stock was down 9.60% to $172.48 in Tuesday’s extended trading, after shedding 6.18% in regular trading.   

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For the quarter, total revenues were $3.66 billion, above the midpoint of the guidance range; GAAP diluted EPS was $1.04, at the upper end of the guidance range, and non-GAAP diluted EPS was $1.05, at the upper end of the guidance range; Cash flow from operating activities for the quarter and fiscal year was $906.4 million and $4.14 billion, respectively, and free cash flow was $817.1 million and $3.77 billion, respectively; Capital returns for the quarter and fiscal year were $876.3 million and $3.35 billion, respectively; and On June 11, 2026, after the market close, the company effected a ten-for-one stock split of its common stock and a proportional increase in the number of authorized shares of common stock. Share and per share information throughout this press release have been retroactively adjusted to reflect the stock split. , /PRNewswire/ -- KLA Corporation (NASDAQ: KLAC) today announced financial and operating results for its fourth quarter and fiscal year ended June 30, 2026. KLA reported GAAP net income of $1.36 billion and GAAP diluted earnings per share ("EPS") of $1.04 on total revenues of $3.66 billion for the fourth quarter of fiscal year 2026. For the fiscal year ended June 30, 2026, KLA reported GAAP net income of $4.83 billion and GAAP diluted EPS of $3.66 on total revenues of $13.58 billion.

"KLA's June quarter results reinforce that the trends driving our growth are strengthening, and we see momentum across our business accelerating in the second half of calendar 2026 and continuing through 2027," said Rick Wallace, president and CEO of KLA Corporation. "KLA remains uniquely positioned on the critical path of AI infrastructure expansion, where the increasing number and sophistication of leading-edge designs across foundry/logic and the rising complexity and performance specifications in memory are driving greater demand for process control. In addition, the AI infrastructure buildout is also driving new growth opportunities in advanced packaging where KLA's market-leading process control product portfolio is well positioned."

GAAP Results

Q4 FY 2026

Q3 FY 2026

Q4 FY 2025

Total Revenues

$3,658 million

$3,415 million

$3,175 million

Net Income

$1,363 million

$1,201 million

$1,203 million

Net Income per Diluted Share

$1.04

$0.91

$0.91

Non-GAAP Results

Q4 FY 2026

Q3 FY 2026

Q4 FY 2025

Net Income

$1,386 million

$1,239 million

$1,244 million

Net Income per Diluted Share

$1.05

$0.94

$0.94

A reconciliation between GAAP operating results and non-GAAP operating results is provided following the financial statements included in this release. KLA will discuss the results for its fiscal year 2026 fourth quarter and full year, along with its outlook, on a conference call today beginning at 2:00 p.m. Pacific Time. A webcast of the call will be available at: ir.kla.com.

First Quarter Fiscal 2027 Guidance

The following details our guidance for the first quarter of fiscal 2027 ending in September:

Total revenues are expected to be in a range of $4.0 billion +/- $200 million GAAP gross margin is expected to be in a range of 61.6% +/- 1.0% Non-GAAP gross margin is expected to be in a range of 62.5% +/- 1.0% GAAP diluted EPS is expected to be in a range of $1.14 +/- $0.10 Non-GAAP diluted EPS is expected to be in a range of $1.16 +/- $0.10 For additional details and assumptions underlying our guidance metrics, please see the company's published Letter to Shareholders, Earnings Slide Presentation and Earnings Infographic on the KLA investor relations website (ir.kla.com). Such Letter to Shareholders, Earnings Slide Presentation and Earnings Infographic are not incorporated by reference into this earnings release.

About KLA:

KLA Corporation ("KLA") develops industry-leading equipment and services that enable innovation throughout the electronics industry. We provide advanced process control and process-enabling solutions for manufacturing wafers and reticles, integrated circuits, packaging and printed circuit boards. In close collaboration with leading customers across the globe, our expert teams of physicists, engineers, data scientists and problem-solvers design solutions that move the world forward. Investors and others should note that KLA announces material financial information including SEC filings, press releases, public earnings calls and conference webcasts using an investor relations website (ir.kla.com). Additional information may be found at: www.kla.com.

Note Regarding Forward-Looking Statements:

Statements in this press release other than historical facts, such as statements pertaining to the amount and timing of dividends, the amount and timing of share repurchases, total revenues, GAAP and non-GAAP gross margin and GAAP and non-GAAP diluted EPS for the quarter ending September 30, 2026, are forward-looking statements and are subject to the Safe Harbor provisions created by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current information and expectations and involve a number of risks and uncertainties. Actual results may differ materially from those projected in such statements due to various factors, including, but not limited to: our vulnerability to a weakening in the condition of the financial markets and the global economy; risks related to our international operations; evolving Bureau of Industry and Security of the U.S. Department of Commerce rules and regulations and their impact on our ability to sell products to and provide services to certain customers in China; tariffs, retaliatory trade measures and other trade restrictions, as well as uncertainty regarding tariff authority, implementation and refund process; costly intellectual property disputes that could result in our inability to sell or use the challenged technology; risks related to the legal, regulatory and tax environments in which we conduct our business; differing stakeholder expectations, requirements and attention to environment, social and governance ("ESG") matters and the resulting costs, risks and impact on our business; unexpected delays, difficulties and expenses in executing against our environmental, climate, or other ESG targets, goals and commitments, or meeting stakeholder expectations; our ability to attract, retain and motivate key personnel; our vulnerability to disruptions and delays at our third-party service providers; cybersecurity threats, cyber incidents affecting our and our business partners' systems and networks; our reliance on critical information, including our enterprise resource planning system for daily operations; risks related to acquisitions, integrations, strategic alliances or collaborative arrangements; climate change, natural disasters, public health crises, terrorism, acts of war and other catastrophic events and the adverse impact on our business operations; the war between Ukraine and Russia, the armed conflict in Iran and elsewhere in the Middle East, and the significant military activity in those regions; lack of insurance for losses and interruptions caused by terrorists and acts of war, and our self-insurance of certain risks including earthquake risk; risks related to fluctuations in foreign currency exchange rates; risks related to fluctuations in interest rates and the market values of our portfolio investments; risks associated with our interest rate hedging activities; risks related to tax and regulatory compliance audits; any change in taxation rules or practices and our effective tax rate; compliance costs with federal securities laws, rules, regulations, NASDAQ requirements, and evolving accounting standards and practices; ongoing changes in the technology industry, including artificial intelligence ("AI") related developments and changes in semiconductor manufacturing processes, customer investment patterns and end-market demand; our vulnerability to a highly concentrated customer base; the cyclicality of the industries in which we operate; our ability to timely develop new technologies and products that successfully address changes in the industry; risks related to the development, adoption, governance and use of AI by us, our competitors and third parties; our ability to maintain our technology advantage and protect proprietary rights; our ability to compete in the industry; the availability and cost of components, materials or subassemblies used in the production of our products, including due to limited-source suppliers, the availability of rare earth elements or DRAM chip shortages; our ability to operate our business in accordance with our business plan; risks related to our debt and leveraged capital structure; we may not be able to declare cash dividends at all or in any particular amount; liability to our customers under indemnification provisions if our products fail to operate properly or contain defects or our customers are sued by third parties due to our products; risks associated with our receipt of government funding; we may incur significant restructuring charges or other asset impairment charges or inventory write offs; we are subject to risks related to receivables factoring, banking arrangements and compliance risk of certain settlement agreements with the government; and risks related to the Court of Chancery of the State of Delaware being the sole and exclusive forum for certain actions and proceedings. For other factors that may cause actual results to differ materially from those projected and anticipated in forward-looking statements in this press release, please refer to KLA's Annual Report on Form 10-K for the year ended June 30, 2025, and other subsequent filings with the Securities and Exchange Commission (including, but not limited to, the risk factors described therein). KLA assumes no obligation to, and does not currently intend to, update these forward-looking statements. 

KLA Corporation

Condensed Consolidated Unaudited Balance Sheets

(In thousands)

June 30, 2026

June 30, 2025

ASSETS

Current assets:

Cash and cash equivalents

$               1,649,842

$               2,078,908

Marketable securities

3,252,566

2,415,715

Accounts receivable, net

2,889,208

2,263,915

Inventories

3,648,538

3,212,149

Other current assets

941,636

728,102

Total current assets

12,381,790

10,698,789

Land, property and equipment, net

1,380,550

1,252,775

Goodwill, net

1,788,758

1,792,193

Deferred income taxes

1,037,224

1,105,770

Purchased intangible assets, net

255,835

444,785

Other non-current assets

1,107,378

773,614

Total assets

$            17,951,535

$            16,067,926

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$                  623,668

$                  458,509

Deferred system revenue

932,901

816,834

Deferred service revenue

604,127

548,011

Other current liabilities

2,144,231

2,262,441

Total current liabilities

4,304,927

4,085,795

Long-term debt

5,887,415

5,884,257

Deferred tax liabilities

473,648

446,945

Deferred service revenue

238,111

348,844

Other non-current liabilities

697,614

609,632

Total liabilities

11,601,715

11,375,473

Stockholders' equity:

Common stock and capital in excess of par value

2,700,409

2,511,922

Retained earnings

3,683,864

2,179,330

Accumulated other comprehensive income (loss)

(34,453)

1,201

Total stockholders' equity

6,349,820

4,692,453

Total liabilities and stockholders' equity

$            17,951,535

$            16,067,926

KLA Corporation

Condensed Consolidated Unaudited Statements of Operations

Three Months Ended June 30,

Twelve Months Ended June 30,

(In thousands, except per share amounts)

2026

2025

2026

2025

Revenues:

Product

$    2,837,151

$    2,472,182

$ 10,453,537

$    9,472,854

Service

820,405

702,559

3,125,939

2,683,308

Total revenues

3,657,556

3,174,741

13,579,476

12,156,162

Costs and expenses:

Costs of revenues

1,413,108

1,207,286

5,255,060

4,751,867

Research and development

399,023

352,989

1,532,118

1,360,334

Selling, general and administrative

291,477

262,706

1,131,518

1,029,734

Impairment of goodwill and purchased intangible assets

—

—

—

239,100

Interest expense

73,274

73,125

284,440

302,166

Other expense (income), net

(68,711)

(50,164)

(229,585)

(171,487)

Income before income taxes

1,549,385

1,328,799

5,605,925

4,644,448

Provision for income taxes

186,326

125,950

775,154

582,805

Net income

$    1,363,059

$    1,202,849

$    4,830,771

$    4,061,643

Net income per share:

Basic

$             1.04

$             0.91

$             3.68

$             3.05

Diluted

$             1.04

$             0.91

$             3.66

$             3.04

Weighted-average number of shares:

Basic

1,306,517

1,320,323

1,311,516

1,330,299

Diluted

1,314,986

1,327,341

1,319,633

1,337,502

KLA Corporation

Condensed Consolidated Unaudited Statements of Cash Flows

Three Months Ended June 30,

(In thousands)

2026

2025

Cash flows from operating activities:

Net income

$           1,363,059

$           1,202,849

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

98,606

96,252

Unrealized foreign exchange (gain) loss and other

6,343

(8,648)

Stock-based compensation expense

82,104

71,269

Deferred income taxes

105,049

(60,482)

Changes in assets and liabilities:

Accounts receivable

(586,459)

(67,608)

Inventories

(212,304)

(48,519)

Other assets

(423,291)

(86,564)

Accounts payable

107,788

(8,601)

Deferred system revenue

312,062

(51,515)

Deferred service revenue

14,172

35,850

Other liabilities

39,301

90,708

Net cash provided by operating activities

906,430

1,164,991

Cash flows from investing activities:

Capital expenditures

(89,288)

(100,408)

Proceeds from capital-related government assistance

—

5,948

Purchases of available-for-sale securities

(860,407)

(748,014)

Proceeds from maturity and sale of available-for-sale securities

780,717

522,875

Purchases of trading securities

(35,233)

(30,013)

Proceeds from sale of trading securities

31,094

26,367

Other, net

—

(2,100)

Net cash used in investing activities

(173,117)

(325,345)

Cash flows from financing activities:

Common stock repurchases

(570,997)

(425,697)

Payment of dividends to stockholders

(305,334)

(253,965)

Issuance of common stock

113,030

103,976

Tax withholding payments related to vested and released restricted stock units

(113,775)

(54,127)

Net cash used in financing activities

(877,076)

(629,813)

Effect of exchange rate changes on cash and cash equivalents

6,595

11,053

Net increase (decrease) in cash and cash equivalents

(137,168)

220,886

Cash and cash equivalents at beginning of period

1,787,010

1,858,022

Cash and cash equivalents at end of period

$           1,649,842

$           2,078,908

Supplemental cash flow disclosures:

Income taxes paid, net

$              198,963

$              231,115

Interest paid, net of capitalized interest

$                11,919

$                  7,772

Non-cash activities:

Dividends payable - financing activities

$                  2,212

$                  2,300

Unsettled common stock repurchase - financing activities

$                  5,494

$                  5,500

Accrued purchase of land, property and equipment - investing activities

$                21,531

$                25,740

KLA Corporation
Segment Information (Unaudited)

The following is a summary of results for each of our three reportable segments and reconciliations to total revenues for the indicated periods:

Three Months Ended June 30,

Twelve Months Ended June 30,

(In thousands)

2026

2025

2026

2025

Revenues:

Semiconductor Process Control

$     3,256,781

$     2,877,647

$   12,244,733

$   10,947,359

Specialty Semiconductor Process

159,704

141,866

584,064

587,107

PCB and Component Inspection

241,110

154,106

750,415

621,721

Total revenues for reportable segments

3,657,595

3,173,619

13,579,212

12,156,187

Effects of changes in foreign currency exchange rates

(39)

1,122

264

(25)

Total revenues

$     3,657,556

$     3,174,741

$   13,579,476

$   12,156,162

KLA Corporation

Condensed Consolidated Unaudited Supplemental Information

Reconciliation of GAAP Net Income to Non-GAAP Net Income

Three Months Ended

Twelve Months Ended

(In thousands, except per share amounts)

June 30, 2026

March 31, 2026

June 30, 2025

June 30, 2026

June 30, 2025

GAAP net income

$  1,363,059

$   1,200,990

$  1,202,849

$  4,830,771

$  4,061,643

Adjustments to reconcile GAAP net income to
non-GAAP net income:

Acquisition-related charges

a

33,069

46,978

50,677

178,075

219,690

Restructuring, severance and other charges

b

—

—

2,133

—

7,128

Impairment of goodwill and purchased
intangible assets

c

—

—

—

—

239,100

Income tax effect of non-GAAP adjustments

d

(17,159)

(17,668)

(18,559)

(71,278)

(79,511)

Discrete tax items

e

6,780

8,328

7,322

21,796

3,630

Non-GAAP net income

$   1,385,749

$    1,238,628

$   1,244,422

$   4,959,364

$   4,451,680

GAAP net income per diluted share

$            1.04

$             0.91

$            0.91

$            3.66

$            3.04

Non-GAAP net income per diluted share

$            1.05

$             0.94

$            0.94

$            3.76

$            3.33

Shares used in diluted net income per share
calculation

1,314,986

1,317,504

1,327,341

1,319,633

1,337,502

Pre-tax Impact of GAAP to Non-GAAP Adjustments Included in Condensed Consolidated Unaudited Statements of Operations

(In thousands)

Acquisition-Related
Charges

Restructuring,
Severance and Other
Charges

Total Pre-tax GAAP to
Non-GAAP Adjustments

Three Months Ended June 30, 2026

Costs of revenues

$                      36,200

$                              —

$                      36,200

Selling, general and administrative

8,470

—

8,470

Other expense (income), net

(11,601)

—

(11,601)

Total in three months ended June 30, 2026

$                      33,069

$                              —

$                      33,069

Three Months Ended March 31, 2026

Costs of revenues

$                      37,106

$                              —

$                      37,106

Selling, general and administrative

9,872

—

9,872

Total in three months ended March 31, 2026

$                      46,978

$                              —

$                      46,978

Three Months Ended June 30, 2025

Costs of revenues

$                      39,024

$                         1,233

$                      40,257

Research and development

—

(3)

(3)

Selling, general and administrative

11,653

903

12,556

Total in three months ended June 30, 2025

$                      50,677

$                         2,133

$                      52,810

Reconciliation of Net Cash Provided by Operating Activities (GAAP) to Free Cash Flow

Three Months Ended June 30,

Twelve Months Ended June 30,

(In thousands)

2026

2025

2026

2025

Net cash provided by operating activities

$              906,430

$           1,164,991

$           4,143,079

$           4,081,903

Capital expenditures

(89,288)

(100,408)

(375,945)

(335,259)

Free cash flow

$              817,142

$           1,064,583

$           3,767,134

$           3,746,644

Capital Returns Calculation

Three Months Ended June 30,

Twelve Months Ended June 30,

(In thousands)

2026

2025

2026

2025

Payments of dividends to stockholders

$              305,334

$              253,965

$           1,057,832

$              904,594

Common stock repurchases

570,997

425,697

2,289,769

2,149,946

Capital returns

$              876,331

$              679,662

$           3,347,601

$           3,054,540

First Quarter Fiscal 2027 Guidance

Reconciliation of GAAP Diluted EPS to Non-GAAP Diluted EPS

Three Months Ending September 30, 2026

(In millions, except per share amounts)

Low

High

GAAP net income per diluted share

$1.04

$1.24

Acquisition-related charges

a

0.03

0.03

Income tax effect of non-GAAP adjustments

d

(0.01)

(0.01)

Non-GAAP net income per diluted share

$1.06

$1.26

Shares used in net income per diluted share calculation

1,312

1,312

Reconciliation of GAAP Gross Margin to Non-GAAP Gross Margin

Three Months Ending September 30, 2026

Low

High

GAAP gross margin

60.6 %

62.6 %

Acquisition-related charges

a

0.9 %

0.9 %

Non-GAAP gross margin

61.5 %

63.5 %

The non-GAAP and supplemental information provided in this press release is a supplement to, and not a substitute for, KLA's financial results presented in accordance with United States GAAP.

To supplement our Condensed Consolidated Financial Statements presented in accordance with GAAP, we provide certain non-GAAP financial information, which is adjusted from results based on GAAP to exclude certain gains, costs and expenses, as well as other supplemental information. The non-GAAP and supplemental information is provided to enhance the user's overall understanding of our operating performance and our prospects in the future. Specifically, we believe that the non-GAAP information, including non-GAAP net income, non-GAAP net income per diluted share, non-GAAP gross margin and free cash flow, provides useful measures to both management and investors regarding financial and business trends relating to our financial performance by excluding certain costs and expenses that we believe are not indicative of our core operating results to help investors compare our operating performances with our results in prior periods as well as with the performance of other companies. The non-GAAP information is among the budgeting and planning tools that management uses for future forecasting. However, because there are no standardized or generally accepted definitions for most non-GAAP financial metrics, definitions of non-GAAP financial metrics are inherently subject to significant discretion (for example, determining which costs and expenses to exclude when calculating such a metric). As a result, non-GAAP financial metrics may be defined very differently from company to company, or even from period to period within the same company, which can potentially limit the usefulness of such information to an investor. The presentation of non-GAAP and supplemental information is not meant to be considered in isolation or as a substitute for results prepared and presented in accordance with United States GAAP. The following are descriptions of the adjustments made to reconcile GAAP net income to non-GAAP net income:

a.

Acquisition-related charges primarily include amortization of intangible assets and write-offs due to abandonment of in-process research and development projects. Acquisition-related charges during the three months ended June 30, 2026 also include a discrete release of $11.6 million of interest on unrecognized tax positions recorded as part of purchase price accounting arising from acquisitions. Although we exclude the effect of amortization of all acquired intangible assets from these non-GAAP financial measures, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase price accounting arising from acquisitions, and such amortization of intangible assets related to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Investors should note that the use of these intangible assets contributed to our revenues earned during the periods presented and are expected to contribute to our future period revenues as well.

b.

Restructuring, severance and other charges primarily include costs associated with employee severance.

c.

Impairment of goodwill and purchased intangible assets in the twelve months ended June 30, 2025 included non-cash expense recognized as a result of the company's testing for goodwill impairment and long-lived assets impairment, which resulted from the continued deterioration of the long-term forecast for our PCB business. Management believes that it is appropriate to exclude these impairment charges as they are not indicative of ongoing operating results and therefore limit comparability. Management also believes excluding this item helps investors compare our operating performance with our results in prior periods as well as with the performance of other companies.

d.

Income tax effect of non-GAAP adjustments includes the income tax effects of the excluded items noted above.

e.

Discrete tax items in the twelve months ended June 30, 2026 include the recognition or adjustment of a deferred tax liability for withholding taxes on future remittance of previously taxed income as a result of new tax legislation as well as an adjustment of certain deferred tax benefits for a change in tax rate due to change in tax incentives. Discrete tax items in the three and twelve months ended June 30, 2025 include the recognition of a net deferred tax liability on foreign currency gains/losses resulting from new tax legislation and a tax benefit from an internal restructuring. Discrete tax items in the twelve months ended June 30, 2025 also include a deferred tax impact relating to the amortization of certain intellectual property as a result of an internal restructuring of ownership rights to better align with how our business operates. Discrete tax items in all periods presented include a tax impact relating to the amortization of the aforementioned tax benefits or similar tax benefits recorded in other periods.

SOURCE KLA Corporation

1.98K Followers

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

KLA (KLAC - Free Report) closed the most recent trading day at $214.69, moving -1.32% from the previous trading session. The stock's performance was behind the S&P 500's daily loss of 0.14%. On the other hand, the Dow registered a loss of 0.01%, and the technology-centric Nasdaq decreased by 0.57%.

The stock of maker of equipment for manufacturing semiconductors has fallen by 11.02% in the past month, lagging the Computer and Technology sector's loss of 4.82% and the S&P 500's gain of 0.25%.

The investment community will be closely monitoring the performance of KLA in its forthcoming earnings report. The company is scheduled to release its earnings on July 28, 2026. The company is predicted to post an EPS of $1, indicating a 6.38% growth compared to the equivalent quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $3.61 billion, up 13.71% from the year-ago period.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $3.71 per share and revenue of $13.53 billion. These totals would mark changes of +11.41% and +11.31%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for KLA. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 2.18% higher within the past month. KLA currently has a Zacks Rank of #3 (Hold).

In terms of valuation, KLA is presently being traded at a Forward P/E ratio of 42.95. This valuation marks a premium compared to its industry average Forward P/E of 25.44.

Meanwhile, KLAC's PEG ratio is currently 2.06. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. By the end of yesterday's trading, the Electronics - Miscellaneous Products industry had an average PEG ratio of 1.66.

The Electronics - Miscellaneous Products industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 65, which puts it in the top 27% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.