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Milpitas, California-based KLA Corporation (KLAC) designs, manufactures, and markets process control, process-enabling, and yield management solutions for the semiconductor and related electronics industries. With a market cap of $100.3 billion, KLA operates through Semiconductor Process Control, Specialty Semiconductor Process, and PCB & Component Inspection segments.
Companies worth $10 billion or more are generally described as "large-cap stocks," KLA fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the semiconductor equipment & materials industry.
Shares of KLA have dipped 18.1% from its 52-week high of $896.32 achieved on Jul. 11. KLAC has declined 6.5% over the past three months, which is less pronounced than the iShares Semiconductor ETF’s (SOXX) 12.6% decline during the same time frame.
Over the longer term, KLA looks more appealing. KLAC is up 43.2% over the past 52 weeks and 26.2% in 2024, outperforming SOXX’s 24.3% gains over the past year and 10.4% returns on a YTD basis, respectively.
To confirm the bullish trend, KLAC has traded above its 200-day and 50-day moving averages over the past year with some recent fluctuations.
Shares of KLA recovered marginally following the release of its Q4 earnings results on Jul. 24 due to better-than-expected revenue of $2.6 billion and adjusted EPS of $6.60. Additionally, the company provided an optimistic Q1 forecast, driven by strong demand for AI-related chip equipment.
However, KLAC dropped 9.5% on Sept. 3 due to a broader sell-off in chip stocks. This followed the release of the ISM manufacturing index’s August figures, which fell below expectations, raising economic concerns.
In comparison, its rival Applied Materials, Inc. (AMAT) has significantly underperformed KLAC. AMAT gained 17.8% over the past 52 weeks and 11.6% in 2024.
Despite its outperformance over the past year, analysts are cautiously optimistic about KLAC, with a “Moderate Buy” consensus rating from 25 analysts. KLAC’s mean price target of $875 represents a potential upside of 17.4% from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
