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KLA Corporation Earnings Preview: What to Watch When KLAC Reports Today

By Eric Bleeker · Updated Jan 29, 5:06pm ET · Published Jan 29, 3:29pm ET

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KLA's Post-Earnings Sell-Off Accelerates to 8.5% Before Their Conference Call Starts

Well, so much for the bounce back! KLA’s fall is accelerating. The stock is now down 8.5%.

The company’s call is just starting so this drop isn’t the result of anything that’s been said, it’s just shifting sentiment and investors being disappointed with forward guidance and margin pressures.

KLA's After Hours Sell-Off Moderating

Shares of KLA were down 7% shortly after releasing earnings.

Shares are now down 4%, so they’ve recovered some losses. Expect Wall Street to question why the company guided to relatively weak gross margins.

Shares Are Now Down 7%

Wall Street isn’t happy with KLA’s earnings. Shares are down 7%.

Simply put, semiconductor equipment stocks have been on fire so moderate beats will be punished at these price levels.

Revenue is projrected to hit $3.35 billion at the midpoint next quarter, which was slightly higher than Wall Street’s expectations of $3.29 billion.

More Details on KLA's Earnings

KLA reported Q2 FY2026 revenue of $3.297 billion, beating the $3.25 billion consensus estimate by 1.4%. Non-GAAP EPS came in at $8.85, slightly ahead of the $8.80 Street expectation.

The results extend KLA’s consistent beat pattern—the company has now exceeded revenue estimates in 28 of the past 29 quarters. Revenue grew 7.3% year-over-year, ahead of the 5.5-5.8% growth range analysts anticipated.

This marks a solid quarter for the process control leader, delivering on the optimistic setup established by Lam Research’s bullish WFE outlook. The modest beat suggests KLA is capitalizing on the industry tailwinds we discussed earlier, particularly strength in advanced packaging and AI-driven semiconductor demand.

Stock reaction and detailed guidance analysis coming shortly as management commentary becomes available.

KLA Earnings Are Out

Here’s the key numbers:

  • EPS: $8.85
  • Revenue: $3.297 billion

As a reminder, here’s what Wall Street Expected

Metric Q2 FY2026 Estimate YoY Growth FY2026 Full Year
Revenue $3.25B 5.5% to 5.8% $13.2B (est.)
Non-GAAP EPS $8.80 7% $36.07 (est.)

KLA Earnings Expected at 4:05 p.m. ET

We’re just minutes away from KLA’s report. We expect KLA’s earnings to cross newswires at 4:05 p.m. ET.

To follow along with this live blog, leave this page open and new updates and analysis will post automatically. 

Lam Research Predicts Strong Growth Across Semiconductor Equipment in 2026

Lam Research reported last night and estimated that the Wafer Fabrication Equipment (WFE) industry would grow from $110 billion in 2025 to $135 billion in 2026. That’s good news for KLA.

Revenue and earnings growth for Fiscal 2026 is more sluggish, but Wall Street is expecting a big step up for both categories in Fiscal 2027. In short, its now ‘priced in’ that the company is going to outperform for quarters to come.

Live coverage has ended. The full story is below.

Full Coverage

The story so far

KLA Corporation (NASDAQ: KLAC | KLAC Price Prediction) reports second quarter fiscal 2026 earnings today after the close. After a blistering run that sent shares up 29% in the past month to an all-time high of $1,581 on January 27, investors are watching whether the semiconductor equipment leader can justify its premium valuation.

Strong Momentum Meets High Expectations

KLA enters this report with serious momentum. The company has beaten revenue estimates for seven consecutive quarters, with an average surprise of 5.2%. Last quarter’s result came in at $8.81 per share, beating the $8.61 estimate by 2.3%. That followed an even stronger third quarter fiscal 2025 performance where KLA delivered $9.38 per share against an $8.55 estimate, a 9.7% beat.

The stock’s recent surge reflects broader enthusiasm around AI infrastructure spending. Multiple analysts upgraded KLA in recent weeks, with Wells Fargo and Morgan Stanley citing strong demand for inspection and metrology tools needed for 2nm, 3nm, and 5nm process technologies. Jim Cramer highlighted KLA as facing “a shortage that can’t be met,” positioning the company as a safer play on chip equipment demand than memory stocks.

Consensus Estimates

Metric Q2 FY2026 Estimate YoY Growth FY2026 Full Year
Revenue $3.25B 5.5% to 5.8% $13.2B (est.)
Non-GAAP EPS $8.80 7% $36.07 (est.)

Advanced Packaging and Process Control in Focus

I’ll be watching KLA’s advanced packaging business closely. The company projected this segment would exceed $925 million in revenue for 2025, representing 70% year-over-year growth. That matters because advanced packaging is critical for chiplet architectures powering AI systems. If KLA can confirm this trajectory continues into 2026, it validates the thesis that AI infrastructure spending has staying power beyond the current hype cycle. As a note, Lam Research (Nasdaq: LRCX) reported last night and highlighted advanced packaging’s growth potential in 2026. They believe their advanced packaging unit can grow 40% this year.

Gross margin guidance will be equally important. Some analysts have flagged potential headwinds from unfavorable product mix and tariff impacts. KLA’s gross margin sat at 62.5% last quarter. Investors will be watching whether management maintains that level or signals pressure ahead.

The China question looms large. U.S. export controls continue tightening, and KLA’s exposure to Chinese customers creates uncertainty. Other semiconductor equipment makers have signaled that sales to China have moderated, we’ll see if KLA continues this trend.

Valuation Leaves Little Room for Error

Here’s the challenge: KLA trades at a forward P/E of 37x while the consensus price target sits at $1,513, which is below current price levels. The stock has already priced in strong execution. Even a solid beat might not move shares much if guidance disappoints or if management sounds cautious about the March quarter.

Competitor Applied Materials trades at 39x trailing earnings with 28.4% operating margins, providing a useful benchmark. KLA’s 41.7% operating margin justifies some premium, but investors will need to see that margin hold up and revenue growth accelerate to support current valuations. All signs point to entering a massive semiconductor equipment cycle, but at these aggressive multiples KLA will need to keep demonstrating solid growth and execution throughout the year.

 

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Eric Bleeker

Eric Bleeker has been investing for more than 20 years. He began his career working at Microsoft before joining Motley Fool, one of the largest publishers of financial research. In his 15 years at Motley Fool Eric served as the General Manager for Fool.com and led coverage in the Technology & Telecom sector. In addition, he was a featured columnist and has hosted dozens of investing seminars attended by more than a million total investors. Eric has more than 1,000 financial bylines to his name and has been featured in The Wall Street Journal, CNBC, Fox Business, and many other leading publications. He is currently focused on artificial intelligence investing and is a CFA Charterholoder.

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