# KLA (KLAC) Sector: Semiconductor equipment | Field | Value | |---|---| | Price | $158.77 | | Market cap | $207B | | Intrinsic value source | Analysts | | Data as of | 2026-10-29 | | Next earnings | 2027-01-28 (estimate) | Analysts: Bullish Picks: Top pick Discount category: Below intrinsic value ## In short The market prices KLA for a peak in chip equipment spending and for China risk, and steady growth in process control through 2027 with a stable margin can close the gap. ## Themes and gap - Themes: AI supplier (ai-supplier), China and geopolitics (china-geopolitics), Tariffs and trade (trade-tariffs) - Gap type: Can close (closable) - Why: The Q2 fiscal 2027 report, expected in late January 2027, and the end of the U.S. export rule suspension in November 2026 show whether growth continues into 2027. ## About KLA makes process control equipment for chipmakers. Its inspection and metrology systems find defects and measure the features on wafers and photomasks during production, so chipmakers can raise their yields. It also sells software and services for its installed base. It has three segments. In Q1 fiscal 2027, which ended on September 30, 2026, Semiconductor Process Control had revenue of $3.75 billion, Specialty Semiconductor Process had revenue of $139 million, and PCB and Component Inspection had revenue of $242 million. Revenue for fiscal 2026, which ended on June 30, 2026, was $13.58 billion. KLA split its stock ten for one on June 11, 2026. ## Thesis The market prices KLA as a supplier at a high point of the chip equipment cycle. AI chips need more and smaller features, more memory and more advanced packaging, and each step needs more inspection and measurement. This drove revenue up 29% to $4.14 billion in Q1 fiscal 2027, and KLA guides $4.7 billion for the December 2026 quarter. But chipmakers can cut spending quickly. China gave 29.8% of revenue in fiscal 2026, and one customer gave about 19%. A U.S. rule that extends export limits to companies that listed parties own is suspended only until November 2026. For the gap to close, three things must be true. Revenue must keep growing through calendar 2027, as KLA expects. Non-GAAP gross margin must stay near the guided 62.5%. Growth from leading-edge logic, memory and packaging must be larger than any fall in sales to China. The Q2 fiscal 2027 report, expected in late January 2027, is the next test. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is a fall in chip equipment spending after the AI build-out slows. ## Checkpoints - Nov 2026: U.S. export rule for affiliates of listed parties. Status: Pending. Watch: An extension of the suspension or no new loss of China sales passes; a return of the rule that cuts sales to more Chinese customers fails. - Jan 28, 2027 (estimate): Q2 fiscal 2027 results: December quarter. Status: Pending. Watch: Revenue near the $4.7 billion guidance and a view of growth through calendar 2027 pass; revenue below the range or a weaker 2027 view fail. ## Balance sheet - Cash: $4.7B - Debt: $6.0B - Net debt: $1.2B - Interest cover: 27× - Undrawn credit line: $1.5B, to July 2030 - Debt due within 12 months: $0.0M - Last debt due: 2062 KLA funds itself with senior unsecured notes. Principal was $5.95 billion at June 30, 2026, due from March 2029 to July 2062, and the carrying value of long-term debt was $5.72 billion at September 30, 2026. KLA swaps $2.00 billion of the fixed-rate notes to floating rates. At September 30, 2026, cash and cash equivalents were $1.53 billion and marketable securities were $3.21 billion. Interest cover is operating income divided by interest expense for Q1 fiscal 2027. The $1.50 billion revolving credit facility runs to July 2030 and had no borrowings at June 30, 2026. Free cash flow was $4.04 billion for the twelve months to September 30, 2026. In Q1 fiscal 2027, KLA paid $936 million for share buybacks and $305 million for dividends. About $9.74 billion of buyback authorization was left at June 30, 2026. As of 2026-09-30. Sources: - https://www.sec.gov/Archives/edgar/data/319201/000031920126000032/exhibit991earningsrelease0.htm - https://www.sec.gov/Archives/edgar/data/319201/000031920126000027/klac-20260630.htm ## Dividends - Dividend yield: 0.5% (last 12 months, at the current price) - Paid per share, last 12 months: $0.84 (4 payments) - Current annual rate: $0.92 ($0.23 x 4 a year) - Payout ratio: 22% of the earnings of the last fiscal year (the year ended 2026-06-30) - Latest ex-dividend date: 2026-08-17, $0.23 per share - Growth over the last 5 years: 17.5% a year - Growth over the last 10 years: 15.0% a year Dividends per share by year: 2016: $0.21, 2017: $0.226, 2018: $0.284, 2019: $0.31, 2020: $0.35, 2021: $0.39, 2022: $0.47, 2023: $0.535, 2024: $0.605, 2025: $0.74. Source: company filings and market data, read on 2026-10-29. ## Recent events - 2026-10-28: KLA reported Q1 fiscal 2027 results. Revenue was $4.14 billion, up 29%, and above the midpoint of guidance. GAAP EPS was $1.18 and non-GAAP EPS was $1.22. Free cash flow was $1.34 billion, and capital returns were $1.24 billion. For the December 2026 quarter, KLA guided revenue of $4.7 billion, plus or minus $200 million, and non-GAAP EPS of $1.44, plus or minus $0.11. - 2026-08-06: KLA declared a quarterly dividend of $0.23 per share, its first dividend after the stock split. - 2026-07-28: KLA reported Q4 fiscal 2026 results. Revenue was $3.66 billion, and non-GAAP EPS was $1.05. For fiscal 2026, revenue was $13.58 billion, GAAP EPS was $3.66 and free cash flow was $3.77 billion. KLA said that it expects growth to speed up in the second half of calendar 2026 and to continue through 2027. - 2026-06-11: KLA's ten-for-one stock split took effect after the market closed. The shares started to trade on a split-adjusted basis on June 12, 2026. - 2026-05-07: KLA announced the ten-for-one stock split and declared a quarterly dividend of $2.30 per share before the split, 21% more than the dividend of February 2026. - 2026-04-29: KLA reported Q3 fiscal 2026 results. Revenue was $3.415 billion, and non-GAAP EPS was $9.40 before the stock split ($0.94 after the split). - 2026-03-12: KLA held an investor day. On March 11, 2026, the board set a new quarterly dividend level of $2.30 per share before the split and approved a new $7 billion share buyback program. - 2026-01-29: KLA reported Q2 fiscal 2026 results. Revenue was $3.30 billion, and non-GAAP EPS was $8.85 before the stock split. ## Latest news and filings - Last earnings: 2026-10-28 (8-K: https://www.sec.gov/Archives/edgar/data/319201/000031920126000032/) - Next earnings: 2027-01-28 (expected; the company has not confirmed it) | Filed | Form | Headline | Period end | XBRL document | Link | | --- | --- | --- | --- | --- | --- | | 2026-10-28 | 8-K | Earnings release | | klac-20261028 | https://www.sec.gov/Archives/edgar/data/319201/000031920126000032/klac-20261028.htm | | 2026-08-06 | 10-K | Annual report for the period ended Jun 30, 2026 | 2026-06-30 | klac-20260630 | https://www.sec.gov/Archives/edgar/data/319201/000031920126000027/klac-20260630.htm | | 2026-08-06 | 8-K | Other company news | | | https://www.sec.gov/Archives/edgar/data/319201/000119312526338242/d165938d8k.htm | | 2026-07-28 | 8-K | Earnings release | | klac-20260728 | https://www.sec.gov/Archives/edgar/data/319201/000031920126000024/klac-20260728.htm | | 2026-06-12 | 8-K | Change to shareholder rights or bylaws | | | https://www.sec.gov/Archives/edgar/data/319201/000119312526269375/d144278d8k.htm | | 2026-05-07 | 8-K | Other company news | | | https://www.sec.gov/Archives/edgar/data/319201/000119312526212093/d116682d8k.htm | | 2026-04-30 | 10-Q | Quarterly report for the period ended Mar 31, 2026 | 2026-03-31 | klac-20260331 | https://www.sec.gov/Archives/edgar/data/319201/000031920126000016/klac-20260331.htm | | 2026-04-29 | 8-K | Earnings release | | klac-20260429 | https://www.sec.gov/Archives/edgar/data/319201/000031920126000014/klac-20260429.htm | | 2026-03-12 | 8-K | Investor disclosure and Other company news | | | https://www.sec.gov/Archives/edgar/data/319201/000119312526102999/d105235d8k.htm | | 2026-02-05 | 8-K | Other company news | | | https://www.sec.gov/Archives/edgar/data/319201/000119312526039637/d80148d8k.htm | Every filing on SEC EDGAR (CIK 319201): https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000319201&type=&dateb=&owner=include&count=40 ## Risks - High: Chip equipment spending is cyclical. KLA's growth in 2026 depends on AI spending by chipmakers and their customers. If AI spending slows, chipmakers can cut orders quickly, and revenue and margins can fall together. - High: China gave 29.8% of revenue in fiscal 2026. U.S. export rules limit sales to many Chinese customers. A rule that extends these limits to companies that listed parties own is suspended only until November 2026. - Medium: One customer gave about 19% of revenue in fiscal 2026 and in fiscal 2025. A delay in that customer's factory plans can lower revenue for several quarters. - Low: New global minimum tax rules (Pillar Two) added $20.2 million of tax in Q1 fiscal 2027. KLA expects this tax to reverse if a planned safe harbor for U.S. groups is adopted, but the timing is not certain. ## Links - Page: https://picks.utilarium.app/company/KLAC/ - History of changes: https://picks.utilarium.app/company/KLAC/history/ - JSON with full history: https://picks.utilarium.app/data/company/KLAC.json > Picks is a personal record of stock picks. It gives general information only, not financial, investment, tax or legal advice, and not advice for your situation. It is not a recommendation to buy or sell. Kevin may hold any stock on this site. Prices, intrinsic values and ratings can be delayed or wrong; check the original source. Full disclaimer: /disclaimer/.