KLA Corporation provides process control and yield management solutions for semiconductor manufacturers. Its offerings include advanced inspection tools, metrology systems, and computational analytics software that together detect defects and help correct process variations in semiconductor fabrication. The equipment and software collect data from production lines and analyze it to identify root causes of defects, enabling manufacturers to adjust processes and improve yields. What sets KLA apart is its integrated portfolio of high-precision hardware, software licenses, and ongoing service contracts aimed at reducing defects and improving reliability across the production cycle, along with a strong emphasis on data-driven analytics. The company’s goal is to help customers produce higher-quality electronic devices more efficiently, and it aims to power its global operations with 100% renewable electricity by 2030.
Company Size
10,001+
Company Stage
IPO
Headquarters
Milpitas, California
Founded
1997
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KLA expects about $1.1 billion in revenue from packaging process control systems in calendar 2026, up more than 70% from a year earlier. Management raised the forecast on its fiscal Q4 2026 call on July 28, 2026, from an earlier high-50% growth estimate. Management links the demand to AI, which requires new, complex packaging steps. Customers adopting methods such as hybrid bonding are buying more inspection tools. Packaging remains a small part of KLA, which had $13.6 billion in sales over the last twelve months. Fiscal Q4 revenue hit a record $3.66 billion, with gross margin of 62.4%. The company guided to $4 billion for the September quarter, plus or minus $200 million. Higher memory component costs and long lead times of 12 to 24 months could limit output. The stock trades at 51.4 times earnings, against 21.9 for the S&P 500.
StockStory named two cash-generating stocks to hold long term and one to avoid, arguing that strong cash flow alone does not make a good investment. It likes KLA Corporation (NASDAQ:KLAC), a maker of equipment that measures and inspects semiconductor chips. Its trailing 12-month free cash flow margin is 27.7%, annual revenue growth over five years was 14.4%, and operating margin is 40.6%. The shares trade at $188.88, or 35.6x forward earnings. It also backs AutoZone (NYSE:AZO), an auto parts retailer with a free cash flow margin of 8.9% and an operating margin of 18.7%. Same-store sales grew an average of 3.4% over two years, and the shares trade at $2,900, or 17.4x forward earnings. It advises avoiding Herbalife (NYSE:HLF), with a 6.2% free cash flow margin. Organic revenue has disappointed, expected sales growth is 2.1%, and earnings per share fell 8.3% annually over three years.
KLA stock returned 73.6% over the twelve months to October 2026, driven by semiconductor makers' spending on chips for artificial intelligence. The earliest signal emerged on 24 July 2024, when executives noted the business had transitioned from stabilising to growing again. Financial results validated this claim. Revenue growth accelerated from 9.1% in fiscal Q4 2024 to 29.8% in fiscal Q3 2025, whilst operating margin widened from 38.0% to 42.5%. The connection to artificial intelligence became public on 30 April 2025, when KLA forecast revenue above Wall Street estimates. The stock run occurred whilst top-line expansion trailed fiscal 2025's pace. For fiscal Q4 2026, KLA reported record revenue of $3.66 billion, up 15% year-over-year, below the 29.8% growth achieved in fiscal Q3 2025.
Global chip equipment sales are forecast to reach a record $229.5 billion in 2028, according to industry trade group SEMI. Four companies dominate different stages of chipmaking: ASML makes lithography machines that print circuit patterns, Applied Materials and Lam Research produce tools that deposit and carve chip layers, whilst KLA specialises in inspection equipment. ASML holds a monopoly on extreme ultraviolet machines used for advanced chips, capturing roughly a quarter of chipmaker capital spending. Applied Materials trades at about 29 times forward earnings, the cheapest of the four. Lam recently posted its highest gross margin in 20 years. KLA trades at approximately 36 times forward earnings, the priciest valuation in the group. All four companies hold Strong Buy or Buy ratings from analysts.
KLA Corporation reported fourth quarter fiscal 2026 revenues of $3.66 billion, above the midpoint of guidance. GAAP diluted earnings per share came in at $1.04, whilst non-GAAP diluted EPS reached $1.05, both at the upper end of guidance. For the full fiscal year ended 30 June 2026, the semiconductor equipment manufacturer posted revenues of $13.58 billion and GAAP diluted EPS of $3.66. Operating cash flow for the year totalled $4.14 billion, with free cash flow of $3.77 billion. The company returned $3.35 billion to shareholders during fiscal 2026 through dividends and share repurchases. KLA completed a ten-for-one stock split on 11 June 2026. For the first quarter of fiscal 2027, KLA expects revenues of $4.0 billion, plus or minus $200 million, with non-GAAP diluted EPS projected at $1.16, plus or minus $0.10.