Wells Fargo Upgrades KLA to Overweight

Wells Fargo analyst Joseph Quatrochi upgraded KLA Corporation (NASDAQ: KLAC) from Equal Weight to Overweight with a price target of $1,600.00 (from $1,250.00).

“KLAC: Upgrading to Overweight ($1,600 PT): We are upgrading KLA to Overweight from Equal Weight as we think the company can continue to drive WFE outperformance by: 1) 2nm Momentum.

We expect positive 2nm demand dynamics to continue in 2026, in which we expect inspection sample rates to remain elevated as the industry begins to introduce BSPD. 2) 5nm / 3nm Strength & HPC Mix.

In addition to modest capacity additions, we think higher process control intensity for HPC-related chips can continue to drive positive demand for KLA.

3) Expanding Leading Edge Opportunities Outside of TSMC.

While we take a wait-and-see approach, we view KLA as well positioned to benefit from increasing process control intensity at Intel – we view as a 2H2026 / 2027 potential opportunity.

4) Advanced Packaging.

We expect KLA to continue to drive momentum from its advanced packaging portfolio in 2026 (vs. >$925M in 2025) largely driven by logic, while we will be interested in increasing opportunities in HBM.

5) Expect Positive Analyst Day Event.

We expect the company to host a positive Analyst Day event in March 2026, further highlighting the increasing importance of process control – we expect KLA to further highlight customer benefit / return of higher sample rates for HPC chips (vs. smartphone) as a positive tailwind.

We leave our C2025 revenue / EPS of $12.70B / $35.36 unchanged, but raise our C2026, C2027, and C2028 estimates to $14.07B / $38.87, $15.67B / $45.17, and $16.47B / $48.32 (vs. prior $13.64B / $37.23, $14.61B / $40.40, and $15.72B / $44.02).

We increase our PT to $1,600 (was $1,100) based on 35x P/E and 30x EV/EBITDA our C2027 estimates.”

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