A clear winner is emerging in the semiconductor equipment space, says Barclays
Barclays believes that KLA is emerging as a clear winner among semiconductor equipment stocks. The bank upgraded the wafer fab equipment maker to overweight from equal weight and hiked its price target to $1,200 from $750. That forecast implies that shares could rise 8%. KLA stock has surged 76% in 2025. Barclays analyst Tom O’Malley highlighted KLA as his top pick as artificial intelligence compute investments help boost the category. Headwinds from the Chinese market also appear to be more minimized for KLA versus its peers, he added. KLAC YTD mountain KLAC YTD chart “At this point, we think eyes will continue to turn towards the LT growth trajectory of these names, and we UG KLAC to OW as we consider it to be the best secular story in the group coupled with the lowest China risk profile,” he wrote. “China is still a risk to WFE, but KLAC appears relatively better insulated from a sales mix % exposure and business model standpoint.” O’Malley also applauded KLA’s prospects for growth outside of the Chinese market in 2026. Specifically, the analyst estimated a growth figure of around 10%. “With this, we think KLAC looks very reasonable next year on a core revenue growth basis and aligns with our WFE model assumptions,” he added. Shares rose more than 1% following the upgrade in thin premarket trading. Analysts are divided on the stock. Of the 28 who cover it, 17 rate it a hold rating, while another 11 rate it a buy or strong buy, per LSEG. ( Learn the best 2026 strategies from inside the NYSE with Josh Brown and others at CNBC PRO Live. Tickets and info here . )
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