KLA’s Dominance and Growth Potential Justify Buy Rating with $900 Price Target

J.P. Morgan analyst Harlan Sur has reiterated their bullish stance on KLAC stock, giving a Buy rating on June 1.

Harlan Sur has given his Buy rating due to a combination of factors that highlight KLA’s strong market position and growth potential. KLA is a leader in the process control market, holding a significant market share of 56% in 2024, which is substantially larger than its nearest competitor. This dominance is supported by a robust growth rate in its process control franchise, outpacing the overall market and demonstrating KLA’s competitive edge.
Additionally, the increasing complexity in semiconductor manufacturing, driven by advancements in technology such as 3nm/2nm Foundry/Logic and high layer count 3D NAND, underscores the growing demand for KLA’s process control systems. KLA’s ability to maintain a premium margin profile, with gross margins exceeding 60% and operating margins over 40%, further solidifies its financial strength. The company’s strategic positioning and technological leadership are expected to drive an earnings per share growth rate of 15-20% over the next three years, justifying the Buy rating and a price target of $900.

In another report released on June 1, Bank of America Securities also maintained a Buy rating on the stock with a $825.00 price target.