The chip-equipment maker beat on revenue and earnings and forecast fiscal second-quarter revenue of $4.7 billion, against an estimate near $4.49 billion. Most AI-linked stocks were lower in extended trading.
KLA delivered the kind of forecast that usually moves a stock. On Wednesday night, it arrived in a market that was selling AI.
The maker of semiconductor inspection and measurement equipment reported fiscal first-quarter revenue of $4.136 billion, above the $4.04 billion analysts expected. Adjusted earnings were $1.22 a share, against an estimate of $1.18, on a split-adjusted basis after a 10-for-1 split. GAAP earnings were $1.18 a share, and free cash flow was $1.34 billion.
The forecast
For the fiscal second quarter, KLA guided revenue to $4.7 billion, plus or minus $200 million, and adjusted earnings to $1.44 a share, plus or minus 11 cents. Analysts had expected about $4.49 billion and $1.36. The revenue midpoint is about 5% above the estimate, and even the bottom of the range, $4.5 billion, is above it.
KLA's Wallace said the results showed "the accelerated growth we expected for the second half of calendar 2026."
A muted response
KLA closed Wednesday at $158.77, up 3.3% before the report. In extended trading it was indicated near $161.74 early Thursday, up about 1.9%.
That is a small move for guidance this far above expectations. The surrounding market may help explain it. After Alphabet reported negative free cash flow and Microsoft reported lower-than-expected capital spending, AI-linked stocks were weaker in extended trading: Micron was indicated down about 3.7%, AMD about 3.3%, Broadcom about 2.7% and Nvidia about 0.9%.
What KLA's numbers say about the cycle
KLA's tools are used to find defects as chipmakers ramp new production processes. A forecast this strong suggests chipmakers are still adding and upgrading capacity, which is the spending that ultimately serves AI demand. The equipment cycle and the hyperscaler spending cycle are linked, but not tightly on a quarter-by-quarter basis.
Two readings of a small move
The positive reading: KLA's guidance points to an equipment cycle that is still accelerating, and a stock that held its gain on a weak night for AI names may have room to catch up once sentiment settles.
The cautious reading: much of the good news was priced into a stock that rose 3% before the report, and if hyperscaler spending turns lumpier, chipmakers' equipment orders could slow later even if the current quarter is strong.
What to watch
Commentary on customer mix between memory and logic, China sales, the fiscal second-quarter result against the $4.7 billion midpoint, and Applied Materials' next results.