The chip-equipment maker topped June-quarter revenue and earnings estimates, but its September-quarter outlook only modestly exceeded Wall Street expectations as investors reassessed AI-driven semiconductor valuations.
KLA Corporation shares fell as much as 10% in extended trading on Monday after the semiconductor equipment company reported a stronger-than-expected fiscal fourth quarter but issued forward guidance that failed to satisfy investors’ elevated expectations. The reaction came after a rally of more than 57% in the stock this year, highlighting how companies tied to the artificial intelligence buildout are being judged against an increasingly demanding benchmark. For the three months ended June 30, KLA posted revenue of $3.66 billion, up 15.1% from a year earlier and above the $3.60 billion average analyst estimate compiled by LSEG. Adjusted earnings per share came in at $1.05, topping the $1.00 consensus forecast. Cash flow from operations was $906.4 million, free cash flow was $817.1 million, and the company returned $876.3 million to shareholders through dividends and buybacks. For fiscal 2026, total revenue reached $13.58 billion. GAAP net income was $4.83 billion, or $3.66 per diluted share, while free cash flow totaled $3.77 billion and capital returns reached $3.35 billion. Chief Executive Officer Rick Wallace said the June-quarter performance showed strengthening growth drivers and that KLA sees momentum across its business accelerating in the second half of calendar 2026 and continuing through 2027. He also said the buildout of AI infrastructure is creating new opportunities in advanced packaging (assembling chips into higher-performance configurations), an increasingly important area as chipmakers move to smaller and more complex production nodes. KLA projected September-quarter revenue of $3.8 billion to $4.2 billion, with a midpoint of $4.0 billion, compared with analyst expectations of about $3.91 billion to $3.92 billion. Adjusted earnings per share guidance was $1.06 to $1.26, versus Wall Street expectations of $1.13 to $1.14. While the midpoint of the earnings range was roughly $1.16 per share, the upside was modest compared with the larger beats investors had come to expect from semiconductor names benefiting from AI demand. CFRA analyst Brooks Idlet described the results as solid but not strong enough to overcome investor concerns about hyperscaler spending and Chinese competition. The market response points to a broader reset in semiconductor equipment stocks, where rich valuations leave little room for guidance that does not clearly surpass expectations.