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Why KLA (KLAC) Is Up 8.7% After Beating Q3 Estimates Amid Export-Rule Uncertainty – And What's Next

Simply Wall St · 01/06 03:28
  • KLA Corporation recently reported a strong third quarter, delivering double-digit year-over-year revenue and EPS growth and exceeding analyst estimates, while management highlighted solid positioning for relative revenue growth in 2025 despite ongoing U.S.-China export restrictions.
  • The company’s inclusion among the best-performing dividend stocks in 2025, alongside rising AI-driven demand for its chipmaking tools, underscores how investors are weighing robust fundamentals against persistent geopolitical and regulatory headwinds.
  • We’ll now examine how this combination of outperformance and export-related pressure may influence KLA’s investment narrative and future risk-reward profile.

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KLA Investment Narrative Recap

To own KLA, you need to believe in its role as a key supplier of process control tools for advanced chips, including AI-related demand, while accepting exposure to export controls and sector cyclicality. The latest quarter’s double-digit revenue and EPS growth, together with management’s confidence in relative 2025 revenue performance, supports the near term growth catalyst, but does not remove the biggest current risk around U.S. China export restrictions and their impact on China-related sales.

The most relevant recent announcement here is KLA’s strong Q3 2025 report, where revenue grew 13% year on year and beat expectations by about 1.1%, alongside higher adjusted EPS. That result, plus guidance for continued solid relative revenue growth, reinforces the story that AI led demand and leading edge exposure can offset some of the export related drag, but it also raises the stakes if China weakness or additional controls hit harder than expected.

However, investors should also be aware that if China demand weakens further or export rules tighten again, then...

Read the full narrative on KLA (it's free!)

KLA's narrative projects $14.8 billion revenue and $5.3 billion earnings by 2028. This requires 6.9% yearly revenue growth and about a $1.2 billion earnings increase from $4.1 billion today.

Uncover how KLA's forecasts yield a $1297 fair value, a 4% downside to its current price.

Exploring Other Perspectives

KLAC 1-Year Stock Price Chart
KLAC 1-Year Stock Price Chart

Five fair value estimates from the Simply Wall St Community span roughly US$627 to US$1,297 per share, showing very different views on KLA’s worth. Set against that spread, the reliance on China amid ongoing export restrictions gives you a clear reason to compare several of these viewpoints before forming your own expectations about the company’s performance.

Explore 5 other fair value estimates on KLA - why the stock might be worth as much as $1297!

Build Your Own KLA Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

  • A great starting point for your KLA research is our analysis highlighting 2 key rewards that could impact your investment decision.
  • Our free KLA research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate KLA's overall financial health at a glance.

Ready To Venture Into Other Investment Styles?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.