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Situated in Milpitas, California, KLA Corporation (KLAC) is a leading semiconductor equipment and services company specializing in process control and yield management solutions. The company provides advanced inspection, metrology, and data analytics tools that help semiconductor manufacturers improve chip quality, enhance production efficiency, and reduce defects.
With a market cap of $103 billion, KLA plays a critical role in the semiconductor supply chain, catering to foundries, logic and memory chipmakers, and advanced packaging providers. Its technologies support the development of cutting-edge chips used in artificial intelligence, high-performance computing, and mobile devices.
Shares of KLAC have underperformed the broader market over the past year. The stock has gained 19.3% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 23%. But in 2025, the narrative has shifted, as KLAC soared 23.4% year-to-date, leaving the S&P 500’s 4% gain in the dust.
Narrowing the focus, KLAC has also lagged behind the VanEck Semiconductor ETF (SMH). The exchange-traded fund has gained about 30.4% over the past year. However, the ETF’s 6.5% gain on a YTD basis pales in comparison to KLAC’s impressive rally in 2025.
Although KLAC lagged over the past year, its strong momentum in 2025 has been driven by rising demand for leading-edge logic, high-bandwidth memory, and advanced packaging, along with its differentiated process control solutions. These factors have fueled both sequential and year-over-year revenue growth, while the accelerating demand for AI-driven semiconductors remains a powerful catalyst.
On Feb. 5, KLA Corporation shares gained over 1% as a sharp decline in the 10-year Treasury note yield to a seven-week low fueled a rally in semiconductor stocks. The broader surge was driven by optimism surrounding lower yields, benefiting chipmakers and equipment suppliers like KLAC.
For the current fiscal year, ending in June 2025, analysts expect KLAC’s EPS to grow 33.1% year over year to $31.59 on a diluted basis. The company's earnings surprise history is robust. It beat the consensus estimate in all four quarters.
Among the 26 analysts covering KLAC stock, the consensus rating is a “Moderate Buy.” That’s based on 14 “Strong Buy” ratings, two “Moderate Buys,” and 10 “Holds.”
This configuration has been relatively stable over the past couple of months.
On Jan. 31, Morgan Stanley (MS) raised KLA Corporation's price target from $703 to $748 while maintaining an "Equal-Weight" rating, citing stronger-than-expected equipment results that have lifted semiconductor stocks. The firm acknowledges potential market softening, particularly in DRAM, but highlights KLA’s focus on advanced logic, longer lead times, and higher margins as key strengths.
The mean price target is $837.68, representing a premium of 7.7% compared to KLAC’s current price levels. The Street-high price target of $950 suggests an upside potential of 22.2%.
