From Financial Modeling Prep: 2025-01-13 12:27:00

Needham analysts upgraded KLA Corporation (NASDAQ:KLAC) from Hold to Buy with a $750 price target, citing confidence in KLA’s ability to navigate industry challenges and capitalize on technology-driven growth opportunities. KLA’s focus on advanced node technologies and strong service backlog are expected to drive long-term growth.

KLA has a history of outperforming in tough times, with semiconductor customers prioritizing technology upgrades. The company’s service business is projected to grow 12-14% annually, supported by a strong backlog from the 2021-2024 wafer fabrication equipment upcycle. This backlog is expected to sustain double-digit service revenue growth.

Concerns about KLA’s exposure to China have been addressed with revised outlooks and proactive measures. The company has adjusted its 2025 China forecast by $500 million and reduced China exposure to 25% by Q4 2024. Despite some analysts not reflecting this adjustment, buy-side expectations are now more aligned with KLA’s outlook, according to Needham.



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