KLA got a $270 price target, but the focus is on what TSMC does next.
KLA Corporation NASDAQ:KLAC finished Friday at $231.52, up 0.9% on the day. Stifel kept its Buy rating, sticking with a $270 target. Even so, the stock closed 1.7% under its July 2 finish and is 23.3% below its June 30 level. That’s a steeper drop than other big U.S. chip-equipment names.
The gap is key since demand forecasts aren’t coming down. Meta Platforms NASDAQ:META will move its Iris AI chip into production in September, aiming to double its computing power to 14 gigawatts by 2027 and could spend up to $145 billion on AI infrastructure this year. Taiwan Semiconductor Manufacturing Co. NYSE:TSM will produce the chip. “You can’t become an AI titan if you are dependent on another company for chips,” Forrester’s Mike Gualtieri said. Reuters
KLA makes process-control systems, the inspection and measurement gear chipmakers use to spot problems and keep their production on track. The recent underperformance seems more like investors trimming expectations than a sign of weaker demand. That theory faces a test next week.
| Asset | July 2 close | July 10 close | July 2–10 return | Since June 30 |
|---|---|---|---|---|
| KLA Corporation NASDAQ:KLAC | $235.55 | $231.52 | -1.7% | -23.3% |
| Applied Materials Inc. NASDAQ:AMAT | $603.04 | $602.50 | -0.1% | -16.7% |
| Lam Research Corp. NASDAQ:LRCX | $351.41 | $350.33 | -0.3% | -19.2% |
| PHLX Semiconductor Index | 12,626.2 | 12,967.2 | +2.7% | -9.0% |
Returns use closing prices. July 2 is the reference date since Nasdaq shut July 3 for Independence Day. KLA returns take into account the 10-for-1 split, which started trading adjusted June 12.
Applied Materials and Lam were almost back to where they traded on July 2 by Friday, but KLA still lagged. Baird investment-strategy analyst Ross Mayfield said it’s “still very much an AI bull market,” but noted oil and rates could shake up a wider rally. Reuters
The most recent target raises give some room but not much. Stifel set a $270 target, up 16.6% from where shares finished Friday. TD Cowen’s Krish Sankar went to $260, a 12.3% upside. Both numbers fall short of covering KLA’s 23.3% loss since June 30.
| Research firm | July call | Target | Implied upside | Added detail |
|---|---|---|---|---|
| Stifel | Keeps Buy; takes target from $191 up to $270 | $270 | 16.6% | Sees $2.5 billion in process-control systems, up 6.4% vs last quarter |
| TD Cowen — Krish Sankar | Buy stay; moves target from $200 to $260 | $260 | 12.3% | Raises target by 30% |
KLA posted fiscal third-quarter revenue of $3.415 billion, up 11.5% from last year. The company put the midpoint of its June-quarter revenue outlook at $3.575 billion. CEO Rick Wallace said, “Our business momentum remains robust.” SEC
Stifel’s systems forecast is a better signal here, suggesting equipment demand is picking up and not just service-related gains. Even so, the market still wants more evidence from KLA than from Applied Materials or Lam. The 4.4-point lag versus the chip index stands out as the number traders are tracking now.
The downside is pretty clear. KLA said government export limits have hurt its backlog and could slow its business in China. China made up 33% of revenue for fiscal 2025. Tighter rules would cut into orders and service. Weak spending from TSMC or higher U.S. inflation would add pressure across equipment names.
TSMC will release its delayed June sales numbers Monday and is set to report Q2 results Thursday, having forecast revenue between $39.0 billion and $40.2 billion and guiding for gross margin of 65.5% to 67.5%. U.S. consumer price index, or CPI, comes out Tuesday at 8:30 a.m. ET. The producer price index (PPI) follows Wednesday, and retail sales land Thursday at the same time.
KLA will report its fiscal Q4 numbers on July 28 after the bell. Until then, TSMC’s sales and spending updates are the main check from outside: if KLA shares stay behind the chip index and equipment peers, even with steady demand, then valuation and investor positions likely matter more here than the order cycle.
