KLA (NASDAQ:KLAC) Stock Falls 2.8% - Time to Sell?

Key Points

• KLA shares fell 2.8% to $178.81 in heavy trading as semiconductor-equipment stocks broadly sold off amid profit-taking and renewed concerns about the durability of AI infrastructure spending.
• Analysts remain generally positive, with a “Moderate Buy” consensus and average price target of $221.26, implying substantial upside. However, some firms lowered targets and warned that KLA’s elevated valuation—roughly 49 times earnings—may limit near-term gains.
• KLA recently exceeded quarterly earnings and revenue expectations, with revenue up 15.2% year over year, while institutional investors increased holdings. The company also maintains strong profitability and raised its quarterly dividend, though recent insider selling adds a potential cautionary signal.

KLA Corporation (NASDAQ:KLAC - Get Free Report)'s stock price traded down 2.8% during mid-day trading on Wednesday. The stock traded as low as $177.39 and last traded at $178.81. 14,431,082 shares changed hands during mid-day trading, an increase of 30% from the average session volume of 11,073,511 shares. The stock had previously closed at $184.00.

Key Stories Impacting KLA

Here are the key news stories impacting KLA this week:

• Positive Sentiment: Wall Street’s consensus price target implies approximately 27.9% upside for KLA Corporation (KLAC). The article notes that improving earnings-estimate revisions could provide a more meaningful near-term catalyst than the target itself. Wall Street Analysts See a 27.86% Upside in KLA
• Positive Sentiment: Recent institutional ownership data showed substantial share additions by investors including Invesco, Norges Bank, Capital International Investors and JPMorgan, suggesting continued support from major shareholders. However, this data reflects the most recent quarterly filings rather than real-time trading. Why KLA stock fell 4.6% today
• Neutral Sentiment: Analysts are divided on valuation. KLA’s five-year performance, strong profitability and exposure to semiconductor inspection demand support the long-term case, but its elevated earnings multiple has prompted questions about whether much of the growth is already priced in. KLA Stock Looks Fully Valued After Its 5 Year Run
• Negative Sentiment: Semiconductor-equipment shares sold off broadly as investors locked in gains and reassessed the durability of AI infrastructure spending. Applied Materials, Lam Research and ASML also weakened, indicating that the move was not specific to KLA. Semiconductor Equipment Stocks Slide as Investors Take Profits
• Negative Sentiment: Morgan Stanley reduced its price target for KLAC to $227, reinforcing concerns that the stock’s valuation and recent gains may limit near-term upside. Additional risks cited include greater competition in parts of the chip supply chain and uncertainty around future AI-related spending. Morgan Stanley cuts target for KLA Corporation stock to USD 227

Analyst Upgrades and Downgrades

KLAC has been the topic of a number of recent research reports. Deutsche Bank Aktiengesellschaft reissued a "hold" rating and set a $195.00 target price (down from $220.00) on shares of KLA in a research report on Wednesday, July 29th. Susquehanna set a $215.00 price target on shares of KLA and gave the company a "neutral" rating in a report on Wednesday, July 29th. Oppenheimer reaffirmed an "outperform" rating and set a $260.00 price target (up from $200.00) on shares of KLA in a report on Thursday, July 16th. JPMorgan Chase & Co. lifted their price target on shares of KLA from $200.00 to $238.00 and gave the stock an "overweight" rating in a research note on Wednesday, July 29th. Finally, Jefferies Financial Group reaffirmed a "buy" rating and set a $210.00 price target (up from $200.00) on shares of KLA in a research note on Wednesday, July 29th. Eighteen equities research analysts have rated the stock with a Buy rating and eleven have assigned a Hold rating to the stock. Based on data from MarketBeat.com, KLA presently has a consensus rating of "Moderate Buy" and an average price target of $221.26.

KLA Trading Down 2.8%

The business has a 50 day simple moving average of $187.96 and a two-hundred day simple moving average of $196.41. The company has a current ratio of 2.88, a quick ratio of 2.03 and a debt-to-equity ratio of 0.93. The stock has a market cap of $233.35 billion, a price-to-earnings ratio of 48.76, a price-to-earnings-growth ratio of 1.68 and a beta of 1.45.

KLA (NASDAQ:KLAC - Get Free Report) last announced its earnings results on Tuesday, July 28th. The semiconductor company reported $1.05 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $1.00 by $0.05. The company had revenue of $3.66 billion for the quarter, compared to analyst estimates of $3.61 billion. KLA had a return on equity of 87.66% and a net margin of 35.57%. KLA's quarterly revenue was up 15.2% on a year-over-year basis. During the same period in the prior year, the company posted $0.94 EPS. KLA has set its Q1 2027 guidance at 1.060-1.260 EPS. As a group, equities analysts anticipate that KLA Corporation will post 5.43 EPS for the current year.

KLA Increases Dividend

The business also recently declared a quarterly dividend, which was paid on Tuesday, September 1st. Investors of record on Monday, August 17th were paid a $0.23 dividend. This represents a $0.92 dividend on an annualized basis and a dividend yield of 0.5%. This is a boost from KLA's previous quarterly dividend of $0.23. The ex-dividend date was Monday, August 17th. KLA's payout ratio is presently 25.07%.

Insider Activity at KLA

In other KLA news, EVP Brian Lorig sold 59,586 shares of the firm's stock in a transaction on Thursday, August 13th. The shares were sold at an average price of $208.13, for a total transaction of $12,401,634.18. Following the completion of the transaction, the executive vice president directly owned 77,681 shares of the company's stock, valued at $16,167,746.53. This trade represents a 43.41% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CAO Virendra Kirloskar sold 4,504 shares of the firm's stock in a transaction on Wednesday, August 5th. The stock was sold at an average price of $195.50, for a total transaction of $880,532.00. Following the transaction, the chief accounting officer directly owned 7,972 shares of the company's stock, valued at approximately $1,558,526. This represents a 36.10% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last three months, insiders sold 243,339 shares of company stock valued at $46,903,454. Insiders own 79.39% of the company's stock.

Institutional Investors Weigh In On KLA

Institutional investors have recently modified their holdings of the stock. Allied Private Wealth LLC acquired a new position in KLA in the second quarter valued at approximately $27,000. Atomic Invest LLC raised its position in shares of KLA by 781.8% during the 2nd quarter. Atomic Invest LLC now owns 97 shares of the semiconductor company's stock worth $27,000 after purchasing an additional 86 shares during the period. Roble Belko & Company Inc raised its position in shares of KLA by 2,275.0% during the 2nd quarter. Roble Belko & Company Inc now owns 95 shares of the semiconductor company's stock worth $29,000 after purchasing an additional 91 shares during the period. Carolina Wealth Advisors LLC raised its position in shares of KLA by 900.0% during the 2nd quarter. Carolina Wealth Advisors LLC now owns 100 shares of the semiconductor company's stock worth $30,000 after purchasing an additional 90 shares during the period. Finally, Cherry Tree Wealth Management LLC lifted its holdings in shares of KLA by 900.0% in the 2nd quarter. Cherry Tree Wealth Management LLC now owns 120 shares of the semiconductor company's stock worth $36,000 after purchasing an additional 108 shares during the last quarter. Institutional investors and hedge funds own 86.65% of the company's stock.

About KLA

KLA Corporation NASDAQ: KLAC develops process-control and yield-management solutions used by semiconductor and electronics manufacturers. Its systems help customers detect defects, measure and analyze materials and structures, and monitor manufacturing processes throughout the production of integrated circuits and other advanced electronic components.

The company's product portfolio includes inspection and metrology systems, wafer and reticle inspection equipment, process-control software, data analytics tools, and related services.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.