- Needham hailed KLA Corp's (NASDAQ:KLAC) 2022 Investor Day in NYC in a note titled "Investor Day Reveals New 2026 Model Targeting Revenue of $14bn and EPS of $38."
- Overall, it was a successful event that provided investors with a fresh LT outlook on KLA's strategy and earnings power while providing hope during this market downturn.
- Despite the ongoing macro issues, Needham believed in KLA's commentary to continue outperforming WFE and gain additional share in semiconductor process control (PC).
- The outlook should provide some solace to investors during this uncertain time. Needham assured.
- Needham saw that as the semiconductor process control leader, KLA has a wide competitive moat in its core market.
- KLA enjoys the WFE industry's highest gross margin and consistently returns capital to investors through dividends and share buybacks.
- Its service business has been a role model for the industry, and Needham saw it would continue to drive KLA's growth and profitability.
- KLA is a clear beneficiary of foundry/logic spending strength and EUV proliferation in 2021-2022.
- Needham believes KLA has a high-quality business, proving it can outperform peers in industry upturns and downturns.
- As such, Needham saw the potential for KLA to deliver strong share price performance despite the market sentiment around the WFE cycle and upgraded the stock to Buy in July 2021.
- Needham maintained KLA with a Buy and price target of $395.
- Price Action: KLAC shares traded lower by 0.78% at $307.99 on the last check Friday.
