KLA (NASDAQ: KLAC) closed Friday, Aug. 14, at $203.72 after falling 2.7% that day. That puts the stock about 9.3% below its July 15 close of $224.50. Cantor Fitzgerald, meanwhile, reiterated a $325 price target after KLA’s latest earnings, which would represent about 59.5% upside from Friday’s close. That is a huge gap, but a price target is a forecast, not a promised return. What interests me is whether the business underneath the stock still supports that kind of optimism.
The Pullback Looks Worse Than the Quarter
KLA’s fiscal fourth quarter, which ended June 30, gave me more reason to focus on the business than the chart. Revenue reached $3.66 billion, up 15.2% from $3.17 billion a year earlier. GAAP earnings were $1.04 per diluted share, and non-GAAP earnings were $1.05. For the September quarter, management expects revenue of $4.0 billion, plus or minus $200 million, with non-GAAP EPS of $1.16, plus or minus $0.10. KLA also completed a 10-for-1 stock split on June 11, so the price and per-share figures here are on the new split-adjusted basis. The stock has been volatile, but the latest operating numbers do not show a business suddenly falling apart. That matters.
Why Cantor’s $325 Call Gets My Attention
Cantor Fitzgerald reiterated an Overweight rating and a $325 price target after KLA reported those results. Against the Aug. 14 close of $203.72, that target implies about 59.5% upside. I would not call that a coming 60% return because a price target is an analyst’s forecast, not a promise. What makes the call interesting is the business underneath it. KLA generated $6.63 billion in fiscal 2026 revenue from wafer inspection, almost half of total company revenue, while services contributed $3.13 billion, or 23%. KLA says investment in 2-nanometer manufacturing, high-bandwidth memory and advanced packaging is increasing the need for process control. That is the part of the bull case I find more useful than the target itself.
China Is the Risk I Would Not Shrug Off
The risk I would not wave away is China. KLA reported that China accounted for 30% of fiscal 2026 revenue, down from 33% in fiscal 2025 and 43% in fiscal 2024. The company says U.S. Commerce Department export controls can restrict shipments, require licenses and interfere with its ability to support some customers. KLA also disclosed that some products headed for China have recently been held by U.S. Customs and Border Protection while officials reviewed the customer or equipment. On top of that, one customer represented about 19% of fiscal 2026 revenue. That is meaningful concentration. A tougher export rule, a delayed fab project or a major customer cutting spending can move earnings expectations quickly.
My Take on KLA at $203.72
At $203.72, I am cautiously constructive, but I would not buy KLA because one analyst says $325. I would buy it only if I wanted exposure to the long-term increase in semiconductor manufacturing complexity and could tolerate large swings along the way. The stock still trades at roughly 56 times fiscal 2026 GAAP earnings, so expectations are not exactly washed out. KLA has also raised its dividend for 17 consecutive years and now pays $0.23 a quarter, but that works out to only about a 0.45% annualized yield at the Aug. 14 price. For retirees, that distinction matters. I would view KLA as a growth position that happens to pay a dividend, not as a core income holding or money I expect to spend in the next few years.