Morgan Stanley upgrades KLA Corp. to Overweight, sees more focus on logic

As previously reported, Morgan Stanley analyst Shane Brett upgraded KLA Corp. (KLAC) to Overweight from Equal Weight with a price target of $1,697, up from $1,214. Memory has emerged as “a key AI bottleneck” and while the firm agrees that memory will remain an AI bottleneck, it expects greater focus to shift toward foundry capacity as a parallel constraint, driving higher foundry capex. Its view of near-term foundry logic WFE revisions “just as strong as memory” and KLA’s “underappreciated” memory process control story lead the firm to revise up its FY26 and FY27 EPS estimates by 7% and 14%, respectively, while raising its rating and target.