Wolfe Research Reiterates Outperform Rating on KLA

Wolfe Research analyst Chris Caso reiterated an Outperform rating and $1,800.00 price target on KLA Corporation (NASDAQ: KLAC).

“KLAC held their Analyst Day yesterday, at which they raised their CY26 outlook and established a 2030 target model, which indicates 2030 revenue / EPS of $26bn / $84.

The long term model is based on a 2030 WFE estimate of $215bn, increasing inspection intensity, KLAC share gains within process control, and a 1% increase in annual service growth to 13-15%… We think most investors will view KLAC’s 2030 guidance to be conservative, however.

We don’t think that conservatism is driven by share or inspection intensity.

Rather, the 2030 target assumes a 1.6% increase in process control intensity, driven by increasing DRAM inspection intensity (since HBM includes many logic elements), and rising inspection in advanced logic (necessary to maintain yields for larger die sizes).

We therefore don’t read much into what we think is a conservative long term WFE forecast… Net, we do think process control will benefit from the strong growth we expect for both DRAM and advanced logic, driven by AI.

It’s becoming clearer that significant capacity additions will be required to support what we’ve forecasted for AI compute and DRAM demand.

We’re in the process of updating our estimates in an effort to better quantify what that means for CY27 estimates, which we do expect to move higher.”

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