Update shared on17 Oct 2025
Fair value Increased 5.54%KLA's analyst price target has increased by approximately $54 to $1,026, reflecting analysts' growing optimism on AI-related demand and improved industry sentiment. This comes despite some caution on future expectations.
Analyst Commentary
Recent analyst updates reflect a mix of optimism and caution regarding KLA’s growth outlook and industry position. The following summarizes the latest perspectives:
Bullish Takeaways- Bullish analysts highlight substantial increases in price targets, underscoring expectations for improved demand linked to AI computing and semiconductor innovation.
- Positive feedback from recent industry events points to noticeable progress in strengthening KLA’s competitive positioning within advanced chip manufacturing and test equipment.
- There is growing confidence that near-term investment in DRAM fabrication and related capital expenditures will bolster KLA’s revenue trajectory.
- The renewed focus on domestic semiconductor manufacturing and anticipated benefits to U.S.-centric equipment suppliers provide an added long-term growth catalyst.
- Some bearish analysts express concern that expectations for 2026 wafer fab equipment spending may be overly optimistic. This could potentially lead to valuation risk if growth normalizes.
- Recent ratings downgrades note that current share price levels may already reflect much of the anticipated growth. This suggests limited upside from here without further execution improvements.
- Ongoing policy changes and market volatility, particularly around hardware vendors adapting to new sourcing guidelines, could introduce near-term uncertainty for KLA’s end markets.
What's in the News
- Between April 1, 2025 and June 30, 2025, KLA repurchased 576,814 shares for $425.51 million. This brings the total repurchase to 17,776,843 shares for $7,968.79 million since June 2022 under its ongoing buyback program (Key Developments).
- KLA issued new earnings guidance for Q1 ending September 30, 2025, projecting revenues of $3.15 billion, plus or minus $150 million. GAAP diluted EPS is expected to be between $7.51 and $9.05 (Key Developments).
Valuation Changes
- Consensus Analyst Price Target has risen moderately to $1,026.32 from $972.48, indicating increased optimism in KLA’s fair value assessment.
- Discount Rate has decreased slightly from 10.26% to 10.22%, reflecting a marginally lower risk premium applied by analysts.
- Revenue Growth projection is virtually unchanged, moving narrowly higher from 7.60% to 7.61%.
- Net Profit Margin estimate has edged down marginally, from 35.75% to 35.72%.
- Future P/E ratio has increased from 30.34x to 32.01x. This suggests either higher growth expectations or a greater willingness by the market to pay for future earnings.
Disclaimer
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