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KLAC Gains From AI Infrastructure: Can It Outpace AMAT & ASML?
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Key Takeaways
KLAC's fiscal 2026 revenues rose 12% to $13.58B as AI and HPC fueled leading-edge investment.
KLAC expects second-half 2026 revenues to be about 20% above the first half, aided by HPC, HBM and EUV.
AI demand is boosting competition in inspection, metrology and advanced-node tools.
KLA Corporation (KLAC - Free Report) is benefiting from accelerating artificial intelligence (AI) infrastructure spending, which is driving higher investments in leading-edge foundry/logic technologies and increasing demand for process-control solutions. Rising hyperscale data-center investments, growing AI compute requirements and increasingly sophisticated chip designs are boosting demand for KLAC’s inspection, metrology and yield-management systems. This momentum strengthens KLAC’s positioning amid competition for semiconductor capital spending from AppliedMaterials (AMAT - Free Report) and ASML Holding (ASML - Free Report) .
Leading-edge manufacturing is becoming increasingly complex as chipmakers move toward smaller geometries and advanced architectures. KLA Corporation highlighted the 2-nanometer (nm) node as an important opportunity, where higher investment levels and rising process-control intensity are creating incremental demand for its solutions. Increasing extreme ultraviolet (EUV) adoption in high-volume logic and dynamic random-access memory (DRAM) manufacturing, including high-bandwidth memory (HBM), is also creating new inspection and metrology requirements. KLAC’s tools help customers accelerate yield learning, improve productivity and ramp advanced technologies into high-volume production.
The benefits are already visible in KLAC’s financial performance. In fiscal 2026, the Semiconductor Process Control segment’s revenues increased 12% year over year, primarily driven by higher revenues from foundry/logic and memory customers, supported by continued leading-edge investment in AI and high-performance computing (HPC) applications. Overall, fiscal 2026 revenues increased 12% year over year to $13.58 billion.
KLAC’s outlook also points to continued momentum. During the fourth quarter of fiscal 2026, management raised its calendar 2026 wafer-fabrication equipment market estimate, including advanced packaging, to the low-$150 billion range, up from its previous $140 billion-plus view and approximately $120 billion in calendar 2025. Broad-based investments across leading-edge logic, foundry, conventional DRAM, HBM, NAND flash memory and advanced packaging are expected to support significant growth in calendar 2027.
KLAC expects second-half 2026 revenues to be approximately 20% higher than the first half, aided by HPC, HBM, increasing EUV adoption in DRAM and advanced packaging technologies such as hybrid bonding. Foundry/logic is expected to represent roughly 73% of Semiconductor Process Control systems revenues from semiconductor customers in the first quarter of fiscal 2027. The company indicated that backlog was expected to reach about $12.5 billion, providing improved visibility into second-half 2026 and 2027 demand.
KLAC Faces Tough Competition
Applied Materials is intensifying competition with KLAC in process diagnostics and control, optical inspection and e-beam inspection. AMAT expects leading-edge foundry/logic, DRAM and advanced packaging to account for roughly 80% of wafer-fab equipment growth in 2026 and 2027. Gate-all-around and FinFET capacity additions drove record foundry/logic revenues in the third quarter of fiscal 2026, while DRAM revenues, including HBM packaging, jumped 52% year over year. Its process diagnostics and control business is also expected to grow more than 50% in calendar 2026, supported by rising adoption of e-beam and optical inspection.
ASML is benefiting from AI-driven investment in logic nodes at 5, 4, 3 and 2 nanometers. ASML expects advanced foundry/logic revenues to rise about 25% in 2026 and EUV revenues to increase roughly 45%. Its metrology and inspection business is also benefiting from higher process-control intensity. The company plans to expand EUV capacity by about 30% in 2027 and is evaluating another 30% increase for 2028, supported by strong order visibility.
Shares of KLA Corporation have risen 39% year to date compared with the broader Zacks Computer and Technology sector’s 16.9% growth.
KLAC Stock’s YTD Price Performance
Image Source: Zacks Investment Research
KLAC stock is trading at a premium, with forward 12-month price/earnings of 29.83X compared with the broader sector’s 20.38X. KLA Corporation has a Value Score of D.
KLAC’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for KLA Corporation’s earnings is currently pegged at $1.17 per share, unchanged over the past 30 days, suggesting 32.95% growth.
View the Zacks #1 Rank List
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KLAC Gains From AI Infrastructure: Can It Outpace AMAT & ASML?
Key Takeaways
KLA Corporation (KLAC - Free Report) is benefiting from accelerating artificial intelligence (AI) infrastructure spending, which is driving higher investments in leading-edge foundry/logic technologies and increasing demand for process-control solutions. Rising hyperscale data-center investments, growing AI compute requirements and increasingly sophisticated chip designs are boosting demand for KLAC’s inspection, metrology and yield-management systems. This momentum strengthens KLAC’s positioning amid competition for semiconductor capital spending from Applied Materials (AMAT - Free Report) and ASML Holding (ASML - Free Report) .
Leading-edge manufacturing is becoming increasingly complex as chipmakers move toward smaller geometries and advanced architectures. KLA Corporation highlighted the 2-nanometer (nm) node as an important opportunity, where higher investment levels and rising process-control intensity are creating incremental demand for its solutions. Increasing extreme ultraviolet (EUV) adoption in high-volume logic and dynamic random-access memory (DRAM) manufacturing, including high-bandwidth memory (HBM), is also creating new inspection and metrology requirements. KLAC’s tools help customers accelerate yield learning, improve productivity and ramp advanced technologies into high-volume production.
The benefits are already visible in KLAC’s financial performance. In fiscal 2026, the Semiconductor Process Control segment’s revenues increased 12% year over year, primarily driven by higher revenues from foundry/logic and memory customers, supported by continued leading-edge investment in AI and high-performance computing (HPC) applications. Overall, fiscal 2026 revenues increased 12% year over year to $13.58 billion.
KLAC’s outlook also points to continued momentum. During the fourth quarter of fiscal 2026, management raised its calendar 2026 wafer-fabrication equipment market estimate, including advanced packaging, to the low-$150 billion range, up from its previous $140 billion-plus view and approximately $120 billion in calendar 2025. Broad-based investments across leading-edge logic, foundry, conventional DRAM, HBM, NAND flash memory and advanced packaging are expected to support significant growth in calendar 2027.
KLAC expects second-half 2026 revenues to be approximately 20% higher than the first half, aided by HPC, HBM, increasing EUV adoption in DRAM and advanced packaging technologies such as hybrid bonding. Foundry/logic is expected to represent roughly 73% of Semiconductor Process Control systems revenues from semiconductor customers in the first quarter of fiscal 2027. The company indicated that backlog was expected to reach about $12.5 billion, providing improved visibility into second-half 2026 and 2027 demand.
KLAC Faces Tough Competition
Applied Materials is intensifying competition with KLAC in process diagnostics and control, optical inspection and e-beam inspection. AMAT expects leading-edge foundry/logic, DRAM and advanced packaging to account for roughly 80% of wafer-fab equipment growth in 2026 and 2027. Gate-all-around and FinFET capacity additions drove record foundry/logic revenues in the third quarter of fiscal 2026, while DRAM revenues, including HBM packaging, jumped 52% year over year. Its process diagnostics and control business is also expected to grow more than 50% in calendar 2026, supported by rising adoption of e-beam and optical inspection.
ASML is benefiting from AI-driven investment in logic nodes at 5, 4, 3 and 2 nanometers. ASML expects advanced foundry/logic revenues to rise about 25% in 2026 and EUV revenues to increase roughly 45%. Its metrology and inspection business is also benefiting from higher process-control intensity. The company plans to expand EUV capacity by about 30% in 2027 and is evaluating another 30% increase for 2028, supported by strong order visibility.
KLAC’s Share Price Performance, Valuation & Estimates
Shares of KLA Corporation have risen 39% year to date compared with the broader Zacks Computer and Technology sector’s 16.9% growth.
KLAC Stock’s YTD Price Performance
Image Source: Zacks Investment Research
KLAC stock is trading at a premium, with forward 12-month price/earnings of 29.83X compared with the broader sector’s 20.38X. KLA Corporation has a Value Score of D.
KLAC’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for KLA Corporation’s earnings is currently pegged at $1.17 per share, unchanged over the past 30 days, suggesting 32.95% growth.
KLA Corporation Price and Consensus
KLA Corporation price-consensus-chart | KLA Corporation Quote
KLA Corporation currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.