MILPITAS, Calif., March 10, 2026, 1:40 PM PDT
KLA shares rose on Tuesday after Barclays sharply lifted its forecast for spending on chipmaking equipment, arguing that demand tied to artificial intelligence data centers still had room to run. The note landed two days before KLA’s investor day on Thursday, when management is due to lay out longer-term targets and market plans.
That timing matters. Citi analyst Atif Malik said investors at the March 12 event in New York would focus on KLA’s updated target model, process-control intensity and scope for further market-share gains, and he said the bank expected possible new advanced packaging products as well.
KLA sells process-control tools, the inspection and measurement systems chipmakers use to spot defects and lift yields, or the share of usable chips coming off a wafer. The company sits deep inside the manufacturing flow, so stronger spending at the leading edge tends to matter fast.
Barclays analyst Tom O’Malley said semiconductor capital equipment spending “doesn’t show any signs of slowing” and now expects wafer fab equipment spending to climb 24% in 2026 to $139 billion and 15% in 2027 to $159 billion, up from his previous growth estimates of 7% and 12%. He said AI data-center chips were driving the broad strength and kept KLA and Applied Materials at overweight, while Lam Research stayed equal weight. Investors
KLA’s last set of numbers also helped. The company reported fiscal second-quarter revenue of $3.3 billion and adjusted earnings of $8.85 a share on Jan. 29, both ahead of analyst expectations, and forecast March-quarter revenue of $3.35 billion, plus or minus $150 million.
Chief Executive Rick Wallace said then that KLA was “a key enabler of the AI ecosystem” and would benefit from AI infrastructure buildout across foundry/logic, memory, advanced packaging and services. He also called the December quarter a record period for revenue, non-GAAP operating income and free cash flow. KLA Corporation
That view is not confined to KLA. After Applied Materials gave a strong forecast last month, Morningstar analyst William Kerwin said he expected “a massive wafer fabrication equipment growth cycle over the next three years” because “artificial intelligence infrastructure demand is immense, and supply is scarce”; Reuters reported KLA and Lam Research also rose on that outlook. Reuters
The risk is that KLA still has to navigate China. Reuters reported after January results that Michael Ashley Schulman of Running Point Capital Advisors saw the March-quarter outlook as “steady growth rather than renewed acceleration,” and KLA’s own release warned that U.S. Commerce Department rules could hurt its ability to sell products and provide services to some customers in China. Reuters KLA Corporation
Barclays’ new call is also much more bullish than the industry’s baseline. In February, Reuters cited SEMI as forecasting equipment sales of $126 billion in 2026 and $135 billion in 2027. Barclays’ much bigger numbers leave KLA with a higher bar going into Thursday’s event.
