KLA is in a buy zone above a 48-week-long consolidation's buy point of 896.32, according to IBD MarketSurge. This is an early-stage base that can net higher gains. Moreover, shares have been trading tightly in the buy zone and near their all-time high of 945.87. Fourth-quarter earnings are due on Thursday. KLA stock is Tuesday's selection for IBD 50 Stocks To Watch.
Shares have rallied as sales and earnings growth accelerated over the past four quarters.
For the fourth quarter ended June 30, analysts polled by FactSet estimate earnings growth of 30%, or $8.56 earnings per share, on sales of $3.1 billion – a 20% increase from the prior year. The company's guidance for the June quarter indicated earnings of $8.53 per share on sales of $3.1 billion at the midpoint.
For the full year, earnings estimates sit at $32.40 per share, or a 36% increase from 2024. In 2026, analysts see profit rising 3% to $33.49 per share.
KLA Stock: AI Demand Drives Growth
KLA makes process control products and sells related services to the chip industry. As Big Tech companies increase their investments in artificial intelligence technologies, demand for KLA's quality control and reliability checks used in the design and manufacture of advanced chips has grown.
The chip equipment maker ranks first in the Electronics-Semiconductor Equipment group, according to IBD Stock Checkup. The group holds 34th place among IBD's 197 industry groups.
KLA also holds an ideal Composite Rating of 99, while accelerating earnings growth in recent quarters has earned the stock a near top-notch Earnings Per Share Rating of 98. Shares have outperformed 88% of other stocks in the Investor's Business Daily database over the past 52 weeks.
Though the Accumulation/Distribution Rating of C+ shows that funds have not been buyers of the stock in the recent 13 weeks, demand for the stock is running strong, going by the Up/Down Volume Ratio of 1.5.
Mutual funds own 59% of outstanding shares. In the IBD mutual fund index, the Janus Henderson Enterprise T Fund (JAENX), the MFS Growth Fund (MFEGX), and the Fidelity Contrafund (FCNTX) hold shares of KLA stock.
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