New York, Feb 1, 2026, 18:17 ET — The market has closed.
- KLA shares ended Friday at $1,427.94, slipping roughly 15%.
- The decline came after the company’s quarterly update, as investors dug into its outlook on chip-tool demand.
- Attention turns to Monday’s open and crucial U.S. data scheduled for later this week.
KLA shares dropped 15.2% on Friday, closing at $1,427.94. Investors dumped the chipmaking equipment maker after its recent forecast fell short of expectations following a strong pre-earnings rally. (Investing)
Markets are closed for the weekend, putting the spotlight on the stock ahead of Monday’s session. Traders will watch closely to see if the selloff was just a one-day dip or the beginning of a deeper slide.
KLA holds a key role as a top supplier of inspection and metrology equipment — the “process control” gear that helps chipmakers detect defects and boost yields. Its forecasts frequently influence projections for wafer fab equipment (WFE) spending, the crucial chip factory tool budget.
KLA exceeded Wall Street expectations for both quarterly revenue and adjusted earnings, and its guidance for the March quarter came in broadly ahead of estimates. Yet, shares dropped roughly 7% in after-hours trading. Michael Ashley Schulman, CIO at Running Point Capital Advisors, noted the stock had “already sprinted into the print” and described the March-quarter outlook as “steady growth rather than renewed acceleration.” (Reuters)
CEO Rick Wallace called it a “record quarter” in the earnings release, highlighting strong process control demand from top-tier foundry, logic, and memory sectors. He also noted KLA is benefiting from the surge in AI infrastructure investment. (KLA Corporation)
Analysts wasted no time debating how much upside remains after KLA’s recent surge — and whether the company’s cautious take on WFE spending signals caution or a red flag. Needham’s Charles Shi said it’s “too early to call a race,” while UBS’s Timothy Arcuri trimmed his price target and held a neutral rating. J.P. Morgan’s Harlan Sur, meanwhile, pushed his target higher and stayed bullish. (Barron’s)
Peers have shifted the benchmark. Lam Research, for instance, recently predicted revenue that beat estimates. CEO Tim Archer commented, “Entering 2026, our expanding product and services portfolio is enabling the market’s transition” toward more complex devices and packages. (Reuters)
Downside risks are spelled out in KLA’s latest quarterly filing. The company pointed to changing export regulations that could limit sales and service to some Chinese clients, alongside tariffs and fluctuations in customer capital expenditures. (KLA Corporation)
On Monday, investors will watch closely for signals from chip-tool peers and major chip buyers. They’ll also be gauging if bargain hunters step in after the stock tumbled well below last week’s peaks.
Upcoming key events include Monday’s release of the Institute for Supply Management’s U.S. manufacturing PMI at 10:00 a.m. ET. Then on Friday, the U.S. Bureau of Labor Statistics will publish the Employment Situation report at 8:30 a.m. ET. (Institute for Supply Management)
