Stifel has increased its price target for KLA Corporation to $1,700 from $1,600 and sustained its Buy recommendation for the company’s stock following the supplier's fiscal second-quarter results and its guidance for the third quarter. The analyst firm said KLA's latest reported figures and forward-looking commentary landed a bit above both Stifel's internal forecast and consensus estimates.
KLA outlined a view for the industry in which wafer fabrication equipment (WFE) spending should reach the low-$120 billion range, or climb to the mid-$130 billion range when advanced packaging is included. The company characterized that combined figure as representing low-teens percentage growth year-over-year. Within that framework, KLA expects its process control revenue to expand at a faster clip than the overall WFE market.
Stifel contrasted KLA's outlook with a materially different projection from a peer, noting that Lam Research has offered a low-20% year-over-year growth expectation. Stifel attributed the divergence to possible differences in base-year calculations and in how each firm defines the addressable market. KLA's internal breakdown sees DRAM-related WFE growing at a high-teens rate year-over-year, while Foundry-Logic WFE growth is projected in the low-teens.
The company said that revenue growth has been constrained in the first half of the year by extended equipment lead times and by limited availability of customer fabrication capacity. KLA signaled that these constraints should ease as the year progresses, with revenue growth set to accelerate in the second half as lead times shorten and fab access improves.
Stifel described KLA as "a core, high quality holding amidst a strengthening semi spending environment," while acknowledging that some investors could be disappointed by elements of the near-term outlook.
Recent financial results and other analyst moves
KLA reported fiscal Q2 results that exceeded both earnings and revenue forecasts. The company posted earnings per share of $8.85, compared with the expected $8.80, and reported revenue of $3.3 billion versus a forecast of $3.25 billion.
Following the results, several sell-side firms adjusted their targets. Cantor Fitzgerald raised its price target on KLA to $1,850 while maintaining an Overweight rating, and noted that KLA's WFE outlook was more conservative than that of Lam Research. Jefferies also lifted its price target to $1,850 from $1,500 and kept a Buy rating; Jefferies emphasized that KLA's 2026 WFE guidance was below its expectations, citing a projection in the high-single-digit to low-double-digit range.
Cantor Fitzgerald attributed KLA's relatively restrained forecast in part to the company’s exposure to lithography investment cycles and to its smaller footprint in NAND memory, which helps explain the difference versus peers with greater NAND exposure.
What this means for markets
The upgrades in price targets from multiple firms, and KLA's modest beat on Q2 results, underline a generally positive tone among analysts for equipment vendors tied to semiconductor capital spending. At the same time, the company’s caution on near-term supply constraints and its more conservative WFE growth assumptions relative to some competitors introduce a degree of nuance into expectations for revenue pacing through the year.