Key Takeaways:
KLA Corporation trades at $182.82, down roughly 40% from its high, while Cantor Fitzgerald's $325 target implies 78% upside.
"Momentum is accelerating in the second half of calendar 2026 and continuing through 2027," Chief Executive Officer Rick Wallace said after the company's fiscal fourth-quarter report.
KLA delivered non-GAAP EPS of $1.05 versus a $0.9987 estimate, a 5.14% beat, on revenue of $3.66 billion, up 15.21% year over year and the fifth straight quarterly beat. Shares still cratered 10.8% on the report and have kept sliding, down 31.32% over the last month. The Q1 FY2027 revenue guide of $4.0 billion plus or minus $200 million came in below the whisper number, and management flagged evolving U.S. Bureau of Industry and Security rules on China sales as a live risk. China contributed $4.04 billion of FY2026 revenue.
The selloff hit the whole semiconductor equipment group. Applied Materials trades at $507.67, down 22.01% over the past month, with a consensus target of $627.66 implying about 24% upside. Lam Research sits at $293.02, off 25.11% despite an 8.1% earnings beat, with a $368.13 consensus target implying roughly 26% upside. Onto Innovation, the smaller process-control peer, trades at $258.58 after a 26.41% monthly decline, with a $369.60 consensus target implying about 43% upside.
Analysts have not blinked on KLA. The consensus rating spans 5 Strong Buy, 13 Buy, 10 Hold, and 1 Sell. JPMorgan lifted its target to $238 from $200 and named KLA its top semi-cap pick. Jefferies raised to $210, citing a backlog inflection. Zacks upgraded to Strong-Buy. Cantor Fitzgerald raised its target to $325 from $250, arguing that KLA's optical and electron-beam inspection tools become indispensable as chipmakers shrink to 2nm and 3nm logic and stack more high-bandwidth memory layers.
KLA trades at a trailing P/E of 50 and a forward P/E of 34. The average Wall Street target of $230.85 from 29 analysts implies roughly 26% upside. Year to date, KLA is up 50.85% versus 9.55% for the S&P 500, so the drop is a correction inside a strong year. Free cash flow of $817 million plus $571 million in quarterly buybacks funds patience, though cash flow fell 22.19% year over year in the quarter and insider activity skews to selling.
The selloff looks more like sentiment resetting than fundamentals cracking. The consensus 26% gap looks defensible even if Cantor's 78% call proves aspirational. Investors will watch the September quarter for sequential revenue acceleration toward the $4.0 billion guide and any further BIS action on China sales.
This article is for informational purposes only and does not constitute investment advice.
