A Look At KLA (KLAC) Valuation After Recent Analyst Upgrades And AI Chip Manufacturing Optimism

Simply Wall St.01-19 09:10

Recent upgrades from TD Cowen, Morgan Stanley, and Wells Fargo have pushed KLA (KLAC) into the spotlight, as analysts highlight its role in advanced and AI-focused chip manufacturing, along with its ...

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Over a longer horizon, the 1 year total...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":["rate"],"viewcount":null,"language":"en","relate_stocks":{"KLAC":"科磊"},"translate_title":"在最近分析师升级和人工智能芯片制造乐观情绪后看看KLA(KLAC)的估值","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"KLAC":1.5},"content_text":"Recent upgrades from TD Cowen, Morgan Stanley, and Wells Fargo have pushed KLA (KLAC) into the spotlight, as analysts highlight its role in advanced and AI-focused chip manufacturing, along with its strong links to leading foundry customers. See our latest analysis for KLA. The recent wave of upgrades has arrived alongside strong momentum in KLA’s share price, with a 30 day share price return of 25.86% and a 90 day share price return of 35.99%. Over a longer horizon, the 1 year total shareholder return of 108.75% and 5 year total shareholder return of 442.48% point to sustained enthusiasm that aligns with growing attention on advanced and AI oriented chip manufacturing. If KLA’s recent move has you thinking about what else is driving the chip story, it could be a useful time to scan high growth tech and AI stocks. With KLA now trading above the average analyst price target and its 1 year total shareholder return above 100%, the key question is whether the rally still leaves room for upside or if the market is already pricing in future growth. AdvertisementMost Popular Narrative: 20.9% Overvalued On the most followed narrative, KLA’s fair value of $1,296.89 sits below the last close of $1,567.82, which puts the recent rally into sharper context. Multiyear customer investment roadmaps, especially at the leading edge in logic/foundry and HBM, are being supported by government incentives worldwide and increasing process complexity. This gives KLA visibility into continued secular capital intensity and positions the company to outperform WFE growth through 2026 while sustaining long-run revenue and FCF growth. Read the complete narrative. Curious what kind of revenue path, margin profile, and future P/E this narrative is baking in, and how they stack up against current earnings power and cash flows? The assumptions behind that fair value lean heavily on sustained demand for process control in AI focused fabs, a richer profit mix, and a valuation multiple that assumes those trends endure. Want to see exactly how those moving parts come together in the model? Result: Fair Value of $1,296.89 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, that story can break quickly if export controls further restrict China demand, or if rising tariffs and costs squeeze the margin assumptions behind this fair value. Find out about the key risks to this KLA narrative.  Build Your Own KLA Narrative If you see the setup differently or prefer to test the numbers yourself, you can build a data-driven view and create a full story in minutes: Do it your way. A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding KLA. Looking for more investment ideas? If you are excited about what is happening at KLA, do not stop there. Use the Simply Wall St Screener to uncover more focused opportunities in minutes.  Spot potential value candidates by scanning these 873 undervalued stocks based on cash flows that may offer pricing that does not fully reflect their cash flow outlook. Explore the AI build out by checking these 24 AI penny stocks that are directly tied to data center, model training, and inference demand. Widen your opportunity set with these 80 cryptocurrency and blockchain stocks that are linked to digital assets, blockchain infrastructure, and related services.   This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.Valuation is complex, but we're here to simplify it.Discover if KLA might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. 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