KLA Corporation’s second quarter was characterized by robust revenue growth and solid operational execution, but the market responded negatively to the results. Management emphasized that increased investments in artificial intelligence (AI) infrastructure and advanced semiconductor manufacturing were major contributors to the company’s performance. CEO Rick Wallace pointed to “accelerating investment tied to AI infrastructure, continued strength in leading-edge foundry/logic, and increasing process control intensity across memory and advanced packaging” as primary drivers. Despite these strengths, the market appeared to focus on lingering concerns around supply chain constraints and memory pricing headwinds, which management acknowledged during the call.
Is now the time to buy KLAC? Find out in our full research report (it’s free for active Edge members).
KLA Corporation (KLAC) Q2 CY2026 Highlights:
- Revenue: $3.66 billion vs analyst estimates of $3.61 billion (15.2% year-on-year growth, 1.3% beat)
- Adjusted EPS: $1.05 vs analyst estimates of $1.00 (5.1% beat)
- Revenue Guidance for Q3 CY2026 is $4 billion at the midpoint, above analyst estimates of $3.95 billion
- Adjusted EPS guidance for Q3 CY2026 is $1.16 at the midpoint, above analyst estimates of $1.13
- Operating Margin: 42.5%, in line with the same quarter last year
- Inventory Days Outstanding: 235, in line with the previous quarter
- Market Capitalization: $238.7 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From KLA Corporation’s Q2 Earnings Call
- C.J. Muse (Cantor Fitzgerald) asked about the trajectory of gross margins with new supply and pricing headwinds. CFO Bren Higgins explained that gross margins are benefiting from leverage and favorable mix, but memory costs are still creating headwinds of over 100 basis points.
- Harlan Sur (JPMorgan) questioned whether broadening foundry and logic investment is driving KLA’s upward outlook. CEO Rick Wallace confirmed that new entrants and increased demand for advanced logic are supporting growth and setting up favorable conditions for next year.
- Vivek Arya (Bank of America) inquired about the competitive environment in China. Wallace responded that process control remains challenging for new entrants due to its complexity and KLA’s established application engineering presence, which provides a competitive moat.
- Krish Sankar (TD Cowen) pressed management on whether KLA can raise prices to offset input cost inflation. Higgins explained that new product cycles allow for pricing adjustments, but it’s difficult to change prices on existing orders due to customer agreements.
- Stacy Rasgon (Bernstein Research) asked how KLA is preparing for bullish industry scenarios and what “sizing for bullish scenarios” means. Higgins clarified that KLA is willing to absorb the cost of flexibility to ensure supply capacity matches possible heightened demand, especially for long lead time components.
Catalysts in Upcoming Quarters
In the coming quarters, important factors to watch include (1) the pace and scale of AI-driven semiconductor investment and related demand for advanced packaging and HBM solutions, (2) KLA’s ability to navigate memory pricing pressures and supply chain constraints while maintaining margins, and (3) progress on capacity expansions and delivery schedules for new fabrication projects. The company’s execution in service revenue growth and specialty businesses will also be important signposts.
KLA Corporation currently trades at $184.02, down from $190.80 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
