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KLA Benefits From Growing AI Infrastructure Demand: What's Ahead?
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Key Takeaways
KLAC gains from rising AI infrastructure demand across process control, WFE and advanced packaging.
KLAC sees advanced packaging systems revenue climbing 70% year over year, reflecting strong demand.
KLAC forecasts WFE growth driven by AI demand for leading-edge logic, memory and packaging.
KLA Corporation (KLAC - Free Report) is benefiting from the growing demand for AI infrastructure through its leadership in process control and its ability to address growth markets in wafer fab equipment (WFE), including high-bandwidth memory (HBM) and advanced packaging.
The company has seen significant growth in its advanced packaging portfolio, which is essential for heterogeneous device integration in AI applications. KLAC’s advanced packaging systems revenue is expected to exceed $925 million in calendar year 2025, marking a 70% year-over-year increase.
Strong investments in WFE and advanced packaging represent a strong growth opportunity for the company. Growth of advanced packaging supporting heterogeneous chip integration has become a new market for KLAC, currently worth $11 billion and growing faster than the core WFE.
KLA anticipates continued momentum in AI infrastructure investments, which will drive growth in wafer fab equipment and advanced packaging markets. The company expects mid- to high single-digit growth in WFE for calendar year 2025, supported by increasing investments in leading-edge foundry/logic and memory to meet AI and premium mobile demand. Advanced packaging is projected to grow more than 20% compared to last year, further solidifying KLA’s position in this expanding market.
KLA benefits from strong demand for leading-edge logic, HBM, and advanced packaging. These factors are expected to help the stock continue its momentum in 2026. For fiscal second-quarter 2026, revenues are expected to be $3.225 billion, plus/minus $150 million.
KLAC Faces Stiff Competition
KLAC is facing stiff competition from the likes of Teradyne (TER - Free Report) and Applied Materials (AMAT - Free Report) , both of which are expanding their footprints in the AI Infrastructure market.
Teradyne is benefiting from strong AI-related demand that is driving significant investments in cloud AI build-out as customers accelerate the production of a wide range of AI accelerators, networking, memory, and power devices. The company anticipates AI-related demand to remain the primary engine of growth in the fourth quarter of 2025 and beyond. For the fourth quarter of 2025, Teradyne expects revenues between $920 million and $1 billion.
Applied Materials is at the forefront of artificial intelligence (AI)-driven semiconductor innovations. The company is leading major device architecture inflections, including gate-all-around transistors, backside power delivery, HBM, advanced packaging, and silicon photonics. These emerging technologies are expected to increase the market for WFE and drive long-term revenue growth for Applied Materials.
KLAC Share Price Performance, Valuation, and Estimates
The Zacks Consensus Estimate for fiscal 2026 earnings is pegged at $35.69 per share, which has increased 0.39% over the past 30 days. This suggests 7.24% year-over-year growth.
Image: Bigstock
KLA Benefits From Growing AI Infrastructure Demand: What's Ahead?
Key Takeaways
KLA Corporation (KLAC - Free Report) is benefiting from the growing demand for AI infrastructure through its leadership in process control and its ability to address growth markets in wafer fab equipment (WFE), including high-bandwidth memory (HBM) and advanced packaging.
The company has seen significant growth in its advanced packaging portfolio, which is essential for heterogeneous device integration in AI applications. KLAC’s advanced packaging systems revenue is expected to exceed $925 million in calendar year 2025, marking a 70% year-over-year increase.
Strong investments in WFE and advanced packaging represent a strong growth opportunity for the company. Growth of advanced packaging supporting heterogeneous chip integration has become a new market for KLAC, currently worth $11 billion and growing faster than the core WFE.
KLA anticipates continued momentum in AI infrastructure investments, which will drive growth in wafer fab equipment and advanced packaging markets. The company expects mid- to high single-digit growth in WFE for calendar year 2025, supported by increasing investments in leading-edge foundry/logic and memory to meet AI and premium mobile demand. Advanced packaging is projected to grow more than 20% compared to last year, further solidifying KLA’s position in this expanding market.
KLA benefits from strong demand for leading-edge logic, HBM, and advanced packaging. These factors are expected to help the stock continue its momentum in 2026. For fiscal second-quarter 2026, revenues are expected to be $3.225 billion, plus/minus $150 million.
KLAC Faces Stiff Competition
KLAC is facing stiff competition from the likes of Teradyne (TER - Free Report) and Applied Materials (AMAT - Free Report) , both of which are expanding their footprints in the AI Infrastructure market.
Teradyne is benefiting from strong AI-related demand that is driving significant investments in cloud AI build-out as customers accelerate the production of a wide range of AI accelerators, networking, memory, and power devices. The company anticipates AI-related demand to remain the primary engine of growth in the fourth quarter of 2025 and beyond. For the fourth quarter of 2025, Teradyne expects revenues between $920 million and $1 billion.
Applied Materials is at the forefront of artificial intelligence (AI)-driven semiconductor innovations. The company is leading major device architecture inflections, including gate-all-around transistors, backside power delivery, HBM, advanced packaging, and silicon photonics. These emerging technologies are expected to increase the market for WFE and drive long-term revenue growth for Applied Materials.
KLAC Share Price Performance, Valuation, and Estimates
KLA stock has surged 67.1% in the trailing six-month period, outperforming the Zacks Computer & Technology sector’s rise of 14.4% and the Zacks Electronics - Miscellaneous Products increase of 28.3%.
KLAC Stock's Performance
Image Source: Zacks Investment Research
KLAC stock is trading at a premium with a forward 12-month Price/Sales of 14.38X compared with the Electronics - Miscellaneous Products industry’s 6.98X. KLAC has a Value Score of F.
KLAC's Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for fiscal 2026 earnings is pegged at $35.69 per share, which has increased 0.39% over the past 30 days. This suggests 7.24% year-over-year growth.
KLA Corporation Price and Consensus
KLA Corporation price-consensus-chart | KLA Corporation Quote
KLAC currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.