KLA Corporation (KLAC)

KLA Corporation data center thesis

KLA owns wafer inspection and metrology for advanced-node fabs: every TSMC N3/N2 wafer, every HBM4 stack, every Intel 18A wafer needs KLA tools to qualify. FY25 revenue hit $12.2B with 61% gross margin, and the company sits at the bottleneck where yield learning translates directly into customer ROI on the rest of their fab equipment spend.

Bull case

• Process-control intensity rises with every node shrink and HBM stack: KLA captures more dollars per wafer at 2nm than at 5nm, which is exactly where TSMC, Samsung, and Intel are spending the next $200B+ of fab capex.
• Near-monopoly on optical inspection (~80%+ share) means KLA gets paid first when fabs ramp, and the $7.9B FY25 backlog is the leading indicator on the 2026-27 leading-edge build-out.
• Advanced packaging (CoWoS, hybrid bonding) is a brand-new metrology TAM expansion; KLAs Bevel/edge inspection lines into HBM stacking are an under-appreciated multi-year revenue uplift.

Bear case

• China revenue exposure (historically 30-40% of bookings) is the most direct casualty of any further export-control tightening on metrology tools, and US/Dutch coordination has been ratcheting in that direction.
• Cycle digestion: backlog dropped from $13.1B (FY22) to $7.9B (FY25), reminding investors that even monopolistic positioning gets re-rated when WFE spend pauses.
• Up 169% in 12 months and trading near all-time highs; the multiple now prices in continuous leading-edge node migration with zero customer push-outs.

Thesis last reviewed 2026-05-09.

KLA Corporation revenue and capex

In fiscal 2026, KLA Corporation reported revenue of $13.6B and capital spending of $375.9M.

From annual reports filed with the SEC; the most recent was filed 2026-08-06.

Analysis mentioning KLA Corporation

• TSMC Wants In on Elon's Terafab. Intel 14A Stays, and Chip Tool Makers Win Either Way, 2026-10-06

Other fab equipment names tracked

• Applied Materials (AMAT)
• ASML Holding (ASML)
• Lam Research (LRCX)