New York, Feb 1, 2026, 16:35 EST — Market closed.
- KLA shares plunged 15.2% on Friday following a steep revision in forecasts for chip-tool demand.
- The company topped quarterly estimates and projected March-quarter revenue beyond Wall Street expectations, yet investors zeroed in on the growth rate.
- As the new week begins, traders are focused on continued selling in semiconductor equipment and key U.S. data due Feb. 6.
KLA Corp shares ended Friday at $1,427.94, dropping 15.2% from the previous close as investors dumped the semiconductor equipment maker’s stock despite a better-than-expected earnings report.
This matters because KLA is seen as a straightforward indicator of capital spending on advanced AI-related chips. When trading in KLA falters, it usually drags down the wider chip-equipment sector.
The move came amid a risk-off mood in U.S. stocks, as investors absorbed new inflation figures and adjusted their bets on the Federal Reserve, weighing heavily on high-multiple tech shares. (Reuters)
KLA posted fiscal second-quarter revenue of $3.3 billion and adjusted earnings of $8.85 per share, beating Wall Street’s expectations, and forecast March-quarter revenue around $3.35 billion, plus or minus $150 million, according to Reuters. Despite the strong numbers, the stock dropped roughly 7% in after-hours trading and slid further on Friday. Michael Ashley Schulman, CIO at Running Point Capital Advisors, noted the shares had “already sprinted into the print,” and characterized the March-quarter outlook as “steady growth rather than renewed acceleration.” (Reuters)
KLA CEO Rick Wallace described the quarter as “record” in a statement, highlighting growing “process control” intensity — the inspection and metrology steps that help catch defects as chip designs shrink and grow more complex. (KLA Corporation)
The bar wasn’t set low. Earlier this week, Lam Research delivered a strong forecast. CEO Tim Archer pointed to rising demand driven by more complex devices and packaging. That upbeat outlook shaped investor expectations for the equipment cycle. (Reuters)
As Monday’s session begins, traders will be watching to see if Friday’s sell-off drags peers down further or sparks some dip-buying after that sharp one-day slide. Moves in options and fresh analyst commentary might fuel additional volatility.
The big question now: is KLA’s guidance just a hiccup tied to supply issues, timing, or product mix? Or does it hint that 2026 tool spending might fall short of earlier bullish forecasts? The industry refers to this capital as “wafer fabrication equipment,” or WFE, essentially the chipmakers’ budget for fab construction and upgrades.
One risk: fresh pressure on China demand. Limits on advanced tech exports and pushes for local sourcing could delay orders, making quarterly demand appear more volatile than investors prefer.
Investors are eyeing the U.S. January employment report, set for release Friday, Feb. 6, at 8:30 a.m. ET. This report could shake up yields and risk appetite, especially as the market reevaluates how much of the chip-sector’s spending strength is baked in. (Bureau of Labor Statistics)
