KLA Boasts an Enviable Product Portfolio in the WFE Market; Shares Undervalued Relative to $396 FVE

On June 16, KLA’s management held an investor day to convey the firm’s future growth outlook along with detailed presentations on its business. We think the firm’s leading position in process diagnostic and control will continue to support solid revenue growth despite near-term macroeconomic concerns. Management called for calendar 2026 revenue to be in the range of $13.5 billion to $14.5 billion, which implies a compound annual growth rate of 9% to 11%. Although this outlook is more in line with our bull case scenario, our unchanged $396 fair value estimate does include solid growth for wide-moat KLA. Given KLA is highly leveraged to the strategic R&D investments by customers for leading-edge process technologies across all chip types, we think prospective investors should find shares of the firm attractive.