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Valued at a market cap of $92.9 billion, KLA Corporation (KLAC) is a leading global supplier of process control and yield management solutions for the semiconductor and electronics industries. Headquartered in Milpitas, California, KLA provides advanced inspection, metrology, and data analytics technologies that help semiconductor manufacturers improve production efficiency and quality.
Companies worth $10 billion or more are generally described as “large-cap” stocks, and KLAC fits right into that category, with its market cap exceeding this threshold. The company plays a critical role in chip fabrication by detecting defects, ensuring precise measurements, and optimizing manufacturing processes.
With a strong focus on innovation and R&D, KLA continues to expand its capabilities in areas like artificial intelligence, deep learning, and advanced materials processing, solidifying its position as a key enabler of next-generation semiconductor technologies.
Despite its strengths, the chip stock has slipped 20.1% from its 52-week high of $896.32, achieved on Jul.11. Shares of KLAC have climbed 11.4% over the past three months, significantly outperforming the broader Nasdaq Composite’s ($NASX) fall of 5.8% over the same time frame.
While short-term momentum remains strong, KLAC’s long-term performance paints a different picture. Over the past 52 weeks, KLAC has surged 1.4%, underperforming NASX’s 16.4% return over the same time frame. Over the past six months, shares of KLAC have dipped 1.7%, lagging behind NASX’s 8.3% gains.
KLAC has been recently trading below its 200-day and 50-day moving averages, confirming its bearish trend,
KLA Corporation's underperformance over the past year stems from U.S. export restrictions on semiconductor equipment sales to China, which have created uncertainty about future revenue. Additionally, a cyclical downturn in semiconductor demand, particularly in key markets like PCs, smartphones, and automotive components, has led to reduced orders for chip manufacturing equipment.
KLAC gained over 2% as major chip stocks rebounded on Mar. 5, reversing early losses. The sector's recovery followed statements from U.S. lawmakers indicating a lack of Congressional support for ending the $52 billion CHIPS Act subsidy program, easing investor concerns.
However, KLAC has outperformed its rival, Applied Materials, Inc. (AMAT), which gained 25.1% over the past 52 weeks and 13.8% over the past six months.
Despite KLAC’s lackluster performance over the past year, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 26 analysts covering it, and the mean price target of $840.68 suggests a modest 17.4% premium to its current levels.
