KLA (NASDAQ:KLAC) Trading Down 8.8% - What's Next?

Key Points

• KLA shares fell 8.8% during Tuesday trading, even as the company remains near elevated valuation levels and has seen notable volatility. The stock traded as low as $243.80 after closing at $269.16 the prior session.
• Despite the pullback, analyst sentiment stays broadly positive: Bank of America raised its price target to $317 and kept a buy rating, while the consensus target across Wall Street is $351.26. The company currently has 20 Buy ratings versus 10 Hold ratings.
• Recent commentary points to AI-driven chip demand as a key growth catalyst for KLA, with analysts highlighting record revenue, advanced packaging opportunities, and strong process control positioning. KLA’s latest earnings also beat expectations, and it continues to support shareholders with a dividend and a $7 billion buyback program.

Shares of KLA Corporation (NASDAQ:KLAC - Get Free Report) traded down 8.8% during mid-day trading on Tuesday . The company traded as low as $243.80 and last traded at $245.4670. Approximately 1,547,274 shares changed hands during mid-day trading, a decline of 86% from the average session volume of 10,990,182 shares. The stock had previously closed at $269.16.

Key KLA News

Here are the key news stories impacting KLA this week:

• Positive Sentiment: Bank of America raised its price target on KLA from $210 to $317 and kept a buy rating, implying meaningful upside from recent trading levels. Benzinga report on Bank of America price target increase
• Positive Sentiment: Recent coverage says KLA is benefiting from AI-related chip demand, with analysts highlighting record revenue, rising advanced packaging opportunities, and strong process control positioning. Zacks article on AI spending and process control demand
• Positive Sentiment: Other recent reports describe KLA as a potential quiet winner of the AI buildout and note additional analyst target increases, reinforcing bullish sentiment around the stock. Insider Monkey article on AI buildout
• Neutral Sentiment: One analyst round-up from The Globe and Mail referenced KLA alongside other technology names, but it did not add a clear new catalyst beyond broader commentary on the sector. The Globe and Mail analyst roundup
• Negative Sentiment: Some coverage notes that KLA has had significant price fluctuations and still trades at a rich valuation, which could make the shares more sensitive to any disappointment in future growth or margins. Insider Monkey article on KLA valuation and AI memory stocks

Wall Street Analysts Forecast Growth

KLAC has been the topic of several recent analyst reports. Citigroup reaffirmed a "buy" rating on shares of KLA in a research note on Wednesday, June 17th. Wells Fargo & Company reissued an "overweight" rating and set a $305.00 price target (up from $210.00) on shares of KLA in a report on Monday. Scotiabank set a $200.00 price objective on shares of KLA in a research note on Wednesday, June 10th. Dbs Bank raised shares of KLA from a "hold" rating to a "moderate buy" rating in a report on Monday, March 9th. Finally, JPMorgan Chase & Co. increased their target price on shares of KLA from $195.00 to $200.00 and gave the company an "overweight" rating in a research report on Thursday, April 30th. Twenty investment analysts have rated the stock with a Buy rating and ten have issued a Hold rating to the company. Based on data from MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and a consensus target price of $351.26.

KLA Price Performance

The company has a 50 day moving average of $197.75 and a two-hundred day moving average of $161.51. The firm has a market cap of $320.22 billion, a P/E ratio of 69.33, a PEG ratio of 3.91 and a beta of 1.50. The company has a quick ratio of 2.11, a current ratio of 3.03 and a debt-to-equity ratio of 1.01.

KLA (NASDAQ:KLAC - Get Free Report) last issued its quarterly earnings results on Wednesday, April 29th. The semiconductor company reported $9.40 earnings per share for the quarter, beating analysts' consensus estimates of $0.92 by $8.48. The company had revenue of $3.42 billion during the quarter, compared to the consensus estimate of $3.37 billion. KLA had a net margin of 35.66% and a return on equity of 91.89%. KLA's revenue was up 11.5% on a year-over-year basis. During the same period in the prior year, the company earned $0.84 EPS. KLA has set its Q4 2026 guidance at 8.870-10.870 EPS. Sell-side analysts expect that KLA Corporation will post 3.71 EPS for the current year.

KLA Cuts Dividend

The company also recently disclosed a quarterly dividend, which was paid on Tuesday, June 2nd. Shareholders of record on Monday, May 18th were paid a dividend of $0.23 per share. The ex-dividend date of this dividend was Monday, May 18th. This represents a $0.92 dividend on an annualized basis and a yield of 0.4%. KLA's dividend payout ratio is currently 26.06%.

KLA declared that its Board of Directors has approved a stock repurchase program on Thursday, March 12th that permits the company to repurchase $7.00 billion in shares. This repurchase authorization permits the semiconductor company to purchase up to 3.6% of its stock through open market purchases. Stock repurchase programs are usually an indication that the company's board of directors believes its stock is undervalued.

Insider Transactions at KLA

In other news, CEO Richard P. Wallace sold 45,120 shares of the stock in a transaction on Thursday, June 11th. The stock was sold at an average price of $221.34, for a total value of $9,986,725.44. Following the completion of the sale, the chief executive officer owned 713,830 shares in the company, valued at $157,996,990.71. This represents a 5.95% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. 91.48% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On KLA

Institutional investors and hedge funds have recently bought and sold shares of the business. Union Heritage Capital LLC purchased a new stake in shares of KLA in the first quarter worth approximately $4,152,000. McIlrath & Eck LLC boosted its holdings in shares of KLA by 6.8% during the first quarter. McIlrath & Eck LLC now owns 94 shares of the semiconductor company's stock worth $139,000 after purchasing an additional 6 shares during the period. Orographic Financial Advisors LLC purchased a new position in KLA during the first quarter valued at approximately $390,000. Kentucky Retirement Systems increased its stake in KLA by 64.7% in the 1st quarter. Kentucky Retirement Systems now owns 13,759 shares of the semiconductor company's stock valued at $20,259,000 after buying an additional 5,404 shares during the period. Finally, Strategic Investment Advisors MI increased its stake in KLA by 5.1% in the 1st quarter. Strategic Investment Advisors MI now owns 2,225 shares of the semiconductor company's stock valued at $3,280,000 after buying an additional 108 shares during the period. Hedge funds and other institutional investors own 86.65% of the company's stock.

KLA Company Profile

KLA is a provider of process control and yield management solutions for the semiconductor and related microelectronics industries. The company designs and manufactures equipment, software and services used by chipmakers to analyze and control manufacturing processes, detect defects, measure critical dimensions and improve yield across wafer fabrication, photomask and packaging operations. KLA's offerings are aimed at enabling production of advanced logic, memory, and specialty devices at progressively smaller technology nodes and more complex package structures.

Its product portfolio includes optical and e-beam inspection systems, metrology tools for critical dimension and film measurement, mask and reticle inspection platforms, as well as enterprise software and data analytics that aggregate process data and drive automated process control.

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