KLA Corporation KLAC appears well-positioned to capitalize on the semiconductor industry’s next wave of greenfield fab investments, driven largely by booming AI infrastructure demand and expanding memory capacity requirements. Its strong exposure to process control intensity at advanced nodes could become a major catalyst for multi-year revenue growth.
In the fiscal third quarter of 2026, KLA reported revenues of $3.42 billion, up 11% year over year, while adjusted earnings rose to $9.40 per share from $8.41 a year ago. Semiconductor Process Control revenues climbed 13% year over year to $3.08 billion, accounting for roughly 90% of total sales.
Management highlighted that greenfield opportunities across DRAM and NAND are expected to increase into 2027, supported by persistent AI-driven demand for high-bandwidth memory and advanced logic chips. KLA also noted that process control intensity is rising as chipmakers adopt increasingly complex architectures, larger die sizes and advanced packaging technologies. Importantly, KLAC expects the wafer fabrication equipment market to exceed $140 billion in 2026, continuing to outgrow the broader market through share gains and higher adoption of process control. Its advanced packaging business is also seeing rapid traction, with management expecting revenues from the segment to surpass $1 billion this year.
Beyond growth, KLA continues to generate robust free cash flow, enabling aggressive shareholder returns. The company recently announced a 21% dividend hike alongside an additional $7 billion share repurchase authorization, signaling confidence in its long-term growth trajectory.
KLA, Onto Innovation & Applied Materials Battle for Chip Tool Supremacy
KLA continues to strengthen its leadership in the semiconductor equipment market, particularly in wafer inspection, metrology and advanced packaging process control systems. Amid such an environment, it faces substantial competition from key market players, including Onto Innovation Inc. ONTO and Applied Materials, Inc. AMAT.
Onto Innovation remains a key player in specialty metrology and advanced packaging inspection solutions, especially in heterogeneous integration and panel-level packaging applications. Meanwhile, Applied Materials leverages its broad semiconductor equipment portfolio, spanning deposition, etch and packaging technologies to capitalize on rising fab investments globally.
As semiconductor manufacturers ramp greenfield fabs and adopt advanced architectures, competition across inspection, yield management and packaging technologies is intensifying, creating long-term growth opportunities for KLA, Onto Innovation and Applied Materials.
KLAC Stock’s Price Performance & Valuation Trend
Shares of this California-based equipment manufacturer have appreciated 58.7% year to date, outperforming the Zacks Electronics - Miscellaneous Products industry, the Zacks Computer & Technology sector and the S&P 500 Index.
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KLAC stock is currently trading at a premium compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 39.62, as shown in the chart below.
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Earnings Estimate Trend of KLAC
For fiscal 2026 and fiscal 2027, the Zacks Consensus Estimate for KLAC’s earnings has moved up over the past 30 days by 1.1% and 4.9%, respectively. The estimated figures for fiscal 2026 and fiscal 2027 reflect year-over-year increases of 11.4% and 34.3%, respectively.
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KLA currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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KLA Corporation (KLAC): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).