KLA (KLAC) AI Stock Analysis

• Market Cap: $184.88B
• Dividend Yield: 0.58%
• Average Volume (3M): 955.44K
• Price to Earnings (P/E): 41.0
• Beta (1Y): 1.95
• Revenue Growth: 22.27%
• EPS Growth: 45.32%
• Country: US
• Employees: 15,000
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 8.85
• Shares Outstanding: 131,076,610
• 10 Day Avg. Volume: 1,308,767
• 30 Day Avg. Volume: 955,437
• PEG Ratio: 0.59
• Price to Book (P/B): 25.39
• Price to Sales (P/S): 9.80
• P/FCF Ratio: 31.85
• Enterprise Value/Market Cap: 0.98
• Enterprise Value/Revenue: 14.24
• Enterprise Value/Gross Profit: 23.02
• Enterprise Value/Ebitda: 30.72
• 1Y Price Target: $1,714.82
• Price Target Upside: 26.50% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 22
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 78 Outperform
• Price Target: $1,628.00 ▲(20.10% Upside)

The score is driven primarily by outstanding financial performance (industry-leading margins and strong free cash flow) and a constructive earnings outlook with continued share gains. Offsetting factors are an expensive valuation (high P/E, low yield) and mixed near-term technical signals indicating consolidation rather than strong momentum.

Positive Factors

Industry-leading margins and profitability

Sustained high gross and net margins reflect pricing power and product differentiation in critical process control tools. Durable margin structure supports reinvestment in R&D, funds operating leverage through cycles, and underpins long-term returns on capital even with cyclical revenue swings.

Strong cash generation and capital returns

Robust FCF generation and high cash conversion (FCF ≈91% of net income) create durable financial flexibility. This funds consistent buybacks/dividends, R&D and strategic investments, and provides a buffer versus cyclical downturns while preserving investment-grade credit access.

Durable services and advanced packaging momentum

A long-tenured services franchise (recurring, high-margin) plus rapid advanced-packaging share gains diversify revenue beyond capital equipment. This mix increases revenue stability, strengthens customer stickiness, and supports multiyear growth as foundry, logic and packaging demand evolve.

Negative Factors

Elevated leverage versus equity

While leverage has improved, net debt remains meaningful relative to equity and cash balances. Higher leverage amplifies earnings volatility, constrains optionality for large M&A or further capital returns, and raises refinancing risk if semiconductor cycles weaken materially.

Semiconductor cycle exposure and uneven growth

KLA’s revenue and equipment demand remain tied to semiconductor capex cycles, producing volatile year-to-year growth. Such cyclicality complicates capacity planning, R&D timing and capital allocation, meaning near-term results can swing sharply despite strong structural positioning.

China market uncertainty and recovery risk

Significant revenue exposure to China subjects KLA to geopolitical, policy and demand volatility. Uneven China recovery and past restrictions can limit addressable demand and complicate customer access or supply chains, making regional risk a structural headwind for growth predictability.

KLA Business Overview & Revenue Model

Company Description

KLA Corporation designs, manufactures, and markets process control, process-enabling, and yield management solutions for the semiconductor and related electronics industries worldwide. It operates through four segments: Semiconductor Process Control; Specialty Semiconductor Process; PCB, Display and Component Inspection; and Other. The company offers integrated circuit (IC) manufacturing products that comprises wafer inspection and review, and metrology; wafer and substrate defect inspection and metrology; reticle defect inspection and metrology; chemical/materials quality analysis; in situ process management and wafer handling diagnostics for IC and original equipment manufacturer (OEM) manufacturing; software products to provide run-time process control, defect excursion identification, process corrections, and defect classification; and refurbished and remanufactured products. It also provides specialty semiconductor manufacturing, benchtop metrology, surface characterization, and electrical property measurement services for general purpose/ lab applications; etch, plasma dicing, deposition, and other wafer processing technologies and solutions for the semiconductor and microelectronics industry. In addition, the company offers direct imaging, inspection, optical shaping, additive printing, and computer-aided manufacturing and engineering solutions for the PCB market; inspection and electrical testing systems to identify and classify defects, as well as systems to repair defects for the display market; and inspection and metrology systems for quality control and yield improvement in advanced and traditional semiconductor packaging markets. The company was formerly known as KLA-Tencor Corporation and changed its name to KLA Corporation in July 2019. KLA Corporation was incorporated in 1975 and is headquartered in Milpitas, California.

How the Company Makes Money

KLA generates revenue primarily through the sale of its semiconductor equipment and related services. The company's key revenue streams include the sale of inspection and metrology tools, which are critical for ensuring quality and precision in semiconductor manufacturing. KLA also earns revenue from software solutions that aid in data analysis and process optimization, as well as from service contracts that provide ongoing support and maintenance for its equipment. Significant partnerships with leading semiconductor manufacturers and technology companies further bolster KLA's earnings by integrating their solutions into high-volume production environments. Additionally, ongoing advancements in semiconductor technology and increasing demand for chips in various applications, such as AI and IoT, contribute positively to KLA's revenue growth.

KLA Financial Statement Overview

Summary

Excellent profitability and cash generation (best-in-class margins and strong free cash flow) support a high score, tempered by moderate leverage and semiconductor cyclicality that can drive uneven year-to-year growth.

Income Statement

KLAC shows exceptional profitability, with TTM (Trailing-Twelve-Months) gross margin around 62% and net margin around 34%, supported by strong operating profitability (EBIT margin ~41%). Revenue has re-accelerated meaningfully in TTM (Trailing-Twelve-Months) after a softer FY2024, and earnings appear to be scaling well with revenue. Key watchouts are the industry’s inherent cyclicality and the fact that growth has been uneven year-to-year (including a revenue decline in FY2024).

Balance Sheet

The balance sheet is solid but moderately leveraged: TTM (Trailing-Twelve-Months) debt is higher than equity (debt-to-equity ~1.22), though leverage has improved materially versus FY2022–FY2024 when debt-to-equity was much higher (~2.0 to ~4.8). Profitability on shareholder capital is extremely strong (TTM return on equity ~0.98), but that is partly amplified by leverage and a comparatively modest equity base. Overall, the company looks financially capable, but leverage remains a constraint versus best-in-class balance sheets.

Cash Flow

Cash generation is strong, with TTM (Trailing-Twelve-Months) operating cash flow (~$4.8B) and free cash flow (~$4.4B) both robust and free cash flow growing sharply (TTM free cash flow growth ~13%). Cash conversion is healthy, with free cash flow running at roughly 91% of net income in TTM (Trailing-Twelve-Months), indicating earnings quality is generally supported by cash. A mild caution is that operating cash flow relative to net income is only slightly above 1.0 in TTM (Trailing-Twelve-Months), and prior years showed more variability.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	12.16B	9.81B	10.50B	9.21B	6.92B
Gross Profit	7.58B	5.88B	6.28B	5.62B	4.15B
EBITDA	5.34B	3.90B	4.50B	4.01B	2.85B
Net Income	4.06B	2.76B	3.39B	3.32B	2.08B
Balance Sheet
Total Assets	16.07B	15.43B	14.07B	12.60B	10.27B
Cash, Cash Equivalents and Short-Term Investments	4.49B	4.50B	3.24B	2.71B	2.49B
Total Debt	6.09B	6.82B	6.06B	6.77B	3.55B
Total Liabilities	11.38B	12.07B	11.15B	11.20B	6.90B
Stockholders Equity	4.69B	3.37B	2.92B	1.40B	3.38B
Cash Flow
Free Cash Flow	3.74B	3.03B	3.33B	3.01B	1.95B
Operating Cash Flow	4.08B	3.31B	3.67B	3.31B	2.19B
Investing Cash Flow	-202.48M	-1.48B	-486.87M	-876.46M	-500.40M
Financing Cash Flow	-3.79B	-1.78B	-2.83B	-2.26B	-1.50B

KLA Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 1355.54
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KLAC, the sentiment is Neutral. The current price of 1355.54 is below the 20-day moving average (MA) of 1479.04, above the 50-day MA of 1320.67, and above the 200-day MA of 1028.25, indicating a neutral trend. The MACD of 46.93 indicates Positive momentum. The RSI at 44.09 is Neutral, neither overbought nor oversold. The STOCH value of 5.34 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for KLAC.

KLA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LRCX	80 Outperform	$296.58B	48.68	65.56%	0.56%	25.66%	46.68%
KLAC	78 Outperform	$184.88B	40.97	100.73%	0.58%	22.27%	45.32%
ADI	77 Outperform	$154.83B	69.42	6.57%	1.43%	16.89%	39.29%
AMAT	77 Outperform	$260.40B	37.92	35.51%	0.69%	4.47%	0.48%
AMD	76 Outperform	$400.94B	119.66	5.32%	―	31.83%	80.45%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
INTC	57 Neutral	$243.81B	-601.34	-0.25%	―	-1.49%	―

KLA Corporate Events

KLA Announces Cash Dividend Amid Shareholder Meeting

On November 5, 2025, KLA held its annual meeting of stockholders where three proposals were considered, including the election of ten directors, ratification of PricewaterhouseCoopers LLP as the independent auditor, and approval of executive compensation. Notably, Emiko Higashi and Gary Moore ended their terms, with Michael McMullen appointed as Chair of the Compensation and Talent Committee. Additionally, on November 6, 2025, KLA announced a cash dividend of $1.90 per share, payable on December 2, 2025, reflecting the company’s ongoing commitment to returning value to shareholders.

The most recent analyst rating on (KLAC) stock is a Buy with a $1450.00 price target. To see the full list of analyst forecasts on KLA stock, see the KLAC Stock Forecast page.