Shares of KLA Corp (NASDAQ:KLAC) tanked in early trading on Wednesday after the company reported its second-quarter results.
Here are the key analyst takeaways:
- Needham analyst Charles Shi maintained a Buy rating and price target of $270.
- Cantor Fitzgerald analyst C.J. Muse reiterated an Overweight rating and price target of $325.
Check out other analyst stock ratings.
Needham: KLA revenues grew 7% sequentially to $3.65 billion, slightly above guidance mid-point, driven by growth in Process Control systems, Shi said in a note. He estimated that, within process control, foundry/logic grew 35%, while DRAM and NAND declined by 43% and 28%, respectively.
The analyst highlighted performance by geography:
- The U.S. led with 60% growth, likely due to strength in Intel Corp (NASDAQ:INTC).
- Taiwan grew 30%, likely driven by strength in Taiwan Semiconductor Manufacturing Co Ltd (NYSE:TSM)
- South Korea contracted by 46%, "likely due to timing of process control equipment move-ins" at Samsung (OTC:SSNLF) and SK Hynix (NASDAQ:SKHY).
Management’s guidance reflects more than 20% growth in the back half of the year, versus the first six months, implying 12%-13% sequential growth in the fourth quarter, he added.
Cantor Fitzgerald: While KLA raised its guidance, this was "not enough amidst heightened expectations," Muse said. KLA offered a modest beat and guided to growth in the back half of the year, implying fourth quarter revenues of $4.49 billion, above consensus of $4.3 billion, he added.
The analyst highlighted that KLA raised WFE (wafer fabrication equipment) guidance from $140 billion to more than $150 billion. "Given the unprecedented visibility from customers, the company continues to plan for significant growth in calendar 2027 as broad-based investment across leading-edge F/L, DRAM, NAND, and Advanced Packaging drives continued capacity expansion," he further wrote.
KLAC Price Action: Shares of KLA had declined by 5.75% to $179.82 at the time of publication on Wednesday.
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