Stock Performance - KLA Corporation's shares have declined 23.1% in the past six months, underperforming the Zacks Computer & Technology sector's appreciation of 1.5% [1] - The company has underperformed peers such as Flex (37.1% gain), Garmin (29.3% gain), and Carrier Global (7.6% gain) over the same period [3] - However, KLA has outperformed the Zacks Electronics - Miscellaneous Products industry's decline of 38.2% [3] Segment Performance - Revenues from the PCB and Component Inspection segment saw a modest year-over-year increase of 1.4% but declined 1% sequentially in Q1 fiscal 2025 [1] Geopolitical and Market Challenges - KLA is navigating risks associated with export controls and geopolitical tensions, particularly in China [2] - China's revenue contribution is expected to drop from 42% to approximately 30% in 2025 [2] Financial Performance - Operating expenses rose to $560 million in the most recent quarter, impacting profitability [5] - Gross margin was 61.2% in Q1 fiscal 2025, slightly below the midpoint of the guided range due to a weaker-than-expected mix of systems products [6] Earnings Trends - The Zacks Consensus Estimate for Q3 fiscal 2025 non-GAAP earnings is $7.63 per share, down 0.9% over the past 30 days but indicating 45.06% year-over-year growth [7] - The consensus mark for fiscal 2025 earnings is $30.37 per share, down 0.8% over the past 30 days but indicating a 27.93% increase compared with fiscal 2024 [7] Investment and Growth Initiatives - KLA is making significant investments in growth initiatives and new product development, focusing on wafer inspection, advanced packaging solutions, and AI-driven tools [4] - These investments have led to higher operating expenses, impacting profitability [5] Historical Performance - KLA has a history of strong quarterly performance, with earnings surpassing the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 6.02% [8] Industry Position - KLA faces uncertainty around capital spending, with demand not aligning with the markets it serves [6] - Its increasing ties to memory makers like Micron and Toshiba are not yet significant enough to make a big impact [6]

Industry Overview - The semiconductor equipment manufacturing market, including KLA (NASDAQ: KLAC), experienced a significant downturn due to weaker-than-expected guidance from ASML and KLA's substantial exposure to China, which accounts for 43% of its revenue [1] Company-Specific Insights - KLA's revenue is heavily dependent on the Chinese market, with 43% of its revenue coming from China, making it vulnerable to market fluctuations and geopolitical risks [1] Technological Context - EUV lithography is a critical process in the semiconductor industry that requires ultra-clean vacuum technology, highlighting the importance of advanced manufacturing techniques in the sector [1] Analyst Background - The analyst has a strong background in the semiconductor industry, with a master's degree in Nanoscience, Nanotechnology, and Nano-Engineering, and extensive experience in both technical and business development roles within the industry [1]

Good news from Taiwan's Hon Hai Precision Industry company (better known as Foxconn) spread to the benefit of semiconductor stocks in general today. Foxconn reported 15% sales growth in Q4 2024, to $63.9 billion, a number that CNBC characterized as "bumper sales performance." The implied strong demand for AI semiconductor chips launched shares of Taiwan Semiconductor Manufacturing Company (TSM 5.58%) to an all-time high at Monday's opening bell. As of 10:35 a.m. ET, TSMC stock remains up a solid 4.9%. Share ...

In the latest market close, KLA (KLAC) reached $650.53, with a +0.39% movement compared to the previous day. The stock trailed the S&P 500, which registered a daily gain of 1.1%. Elsewhere, the Dow gained 0.91%, while the tech-heavy Nasdaq added 1.35%.Shares of the maker of equipment for manufacturing semiconductors have appreciated by 0.51% over the course of the past month, underperforming the Computer and Technology sector's gain of 5.09% and outperforming the S&P 500's gain of 0.22%.Analysts and investo ...

KLA (KLAC) ended the recent trading session at $655.98, demonstrating a +0.34% swing from the preceding day's closing price. This change lagged the S&P 500's 0.38% gain on the day. At the same time, the Dow lost 0.25%, and the tech-heavy Nasdaq gained 1.24%.Prior to today's trading, shares of the maker of equipment for manufacturing semiconductors had gained 6.4% over the past month. This has outpaced the Computer and Technology sector's gain of 3.43% and the S&P 500's gain of 1.17% in that time.Analysts an ...

KLA Corporation’s (KLAC) shares have lost 13.7% over the past three months, underperforming the broader Zacks Computer and Technology sector’s return of 9.4%.KLA's underperformance can be attributed to challenges in its PCB and Component Inspection segment. Export controls and geopolitical tensions are other headwinds.However, the rising demand for advanced packaging, which enhances process control intensity, has been a positive development for KLAC. Increased investments across multiple nodes and higher ca ...

KLA Corporation Conference Call Summary Company Overview - **Company**: KLA Corporation (NASDAQ: KLAC) - **Event**: UBS Global Technology and AI Conference - **Date**: December 4, 2024 Key Points Industry Dynamics - **Export Controls Impact**: KLA anticipates a $500 million incremental impact from new export restrictions for 2025, with 70% affecting systems and 30% affecting services [3][4] - **China Business Decline**: KLA expects its China business to decrease by approximately 20% in 2025, down from about 40% in 2024 [4] - **WFE Growth Expectations**: Despite challenges, KLA expects modest growth in wafer fabrication equipment (WFE) spending in 2025, driven by leading-edge investments [7][8] Financial Performance - **Service Growth**: Service revenue growth is projected to be in the high single digits to low double digits, down from a trend of 12% to 14% due to headwinds [5] - **Market Share**: KLA's market share in WFE is expected to increase by approximately 75 basis points, with a potential gain of 20 basis points in 2025 despite challenges in China [8][9] - **Revenue Growth Projections**: KLA anticipates a revenue growth rate of 9% to 11% over time, with operating margins between 40% and 50% [27] Product and Technology Insights - **Advanced Packaging Demand**: KLA's revenue from advanced packaging is projected to grow from $300 million in 2023 to $750 million in 2025, driven by high-performance computing [14] - **Software Integration**: KLA emphasizes the importance of software in its value proposition, with standalone software revenue doubling to $175 million over the past four to five years [42] - **AI Utilization**: KLA is leveraging AI to enhance its systems and improve yield learning cycles, collaborating with NVIDIA on advanced computing architectures [45][46] Market Trends and Customer Behavior - **Backlog and RPO**: KLA's backlog has increased to approximately 10-11 months, reflecting both cyclical and secular changes in customer ordering behavior [47][52] - **Regionalization Effects**: The emergence of government stimulus in Japan and other regions is expected to create opportunities for KLA, particularly in service and support for new foundries [54][56] Challenges and Considerations - **Gross Margin Stability**: KLA's gross margins have been stable around 61% to 62%, with challenges in pushing margins higher due to pricing discipline and market dynamics [28][31] - **China Market Rationalization**: There is a potential for forced consolidation in the Chinese market, which could impact KLA's long-term outlook [20][24] Conclusion - KLA Corporation is navigating a complex landscape with export controls and a shifting market in China, while also capitalizing on growth opportunities in advanced packaging and software integration. The company maintains a positive long-term outlook with expected revenue growth and stable margins, despite short-term challenges.

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) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.KLA currently has an average brokerage recommen ...

KLA Corporation (NASDAQ:KLAC) Wells Fargo 8th Annual TMT Summit Conference December 3, 2024 12:30 PM ET Company Participants Bren Higgins - CFO Brian Lorig - Head of Global Support and Services Conference Call Participants Joe Quatrochi - Wells Fargo Joe Quatrochi Great. Let's go ahead and get started. So I'm Joe Quatrochi, the semi cap analyst at Wells Fargo. Today, we're pleased to feature KLA, CFO, Bren Higgins, as well as the Head of Global -- I'm sorry, Head of Global Support and Services, Brian Lorig ...

KLA Corporation (NASDAQ:KLAC) Wells Fargo 8th Annual TMT Summit Conference December 3, 2024 12:30 PM ET Company Participants Bren Higgins - CFO Brian Lorig - Head of Global Support and Services Conference Call Participants Joe Quatrochi - Wells Fargo Joe Quatrochi Great. Let's go ahead and get started. So I'm Joe Quatrochi, the semi cap analyst at Wells Fargo. Today, we're pleased to feature KLA, CFO, Bren Higgins, as well as the Head of Global -- I'm sorry, Head of Global Support and Services, Brian Lorig ...