KLA’s leading market share in the process-control sector of wafer fabrication devices will act as an essential chauffeur for its long-lasting development, Bernstein stated. The financial investment company started protection of the semiconductor devices maker at an outperform ranking and set a cost target of $1,700. That indicates the stock can leap 18% from existing levels. Expert Stacy Rasgon praised the business as the dominant force in the procedure control market, which he called a $14.3 billion subsector that is vital for semiconductor production within the bigger $112 billion worldwide wafer fabrication devices market. KLAC 1Y mountain KLAC 1Y chart This subsector has actually currently grown at an 18% substance yearly development rate in between 2019 and 2024, and Rasgon believes it might increase even further over the next 5 years. He forecasts an 11% substance yearly development rate for the stock in between 2024 and 2029. “KLA ought to gain from this as the sector’s # 1 gamer without a doubt, with > > 6x the scale of its next biggest rival in the area at ~ 57% general market share which it has actually even broadened over the last a number of years. We approximate that share gains will likely continue due to a strong competitive position and growth-favorable mix within Process Control subsegments,” the expert composed. Rasgon likewise thinks that the business and subsector stands strong enough to weather versus increasing Chinese competitors. “Process control ought to likewise be more insulated than other WFE sectors from regional Chinese competitors due to its intricacy, therefore restricting alternative danger,” he composed. “Additionally, KLA has currently ingrained China normalization into its CY26 outlook, rather derisking its China numbers for next year.” The expert included that he sees prospective benefit to medium-term numbers as the business’s services service is most likely to speed up from here. Another tailwind would originate from Intel continuing to press its foundry service, which would require structurally greater procedure control tool financial investment levels. Rasgon likewise highlighted KLA’s strong management group, which has in the previous struck an excellent balance in between returning money to investors and making natural and inorganic financial investments. Shares of KLA Corporation have actually skyrocketed 106% over the previous 12 months.
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