What is KLA's year-to-date stock performance?

KLA has achieved an impressive year-to-date gain of 84.6%.

Why is KLA's advanced packaging revenue growing?

Growth is driven by secular trends in 2.5D/3D architectures and HBM adoption.

What are the valuation concerns for KLA stock?

KLA's P/E ratio is 36.5x, exceeding industry averages and raising questions about valuation risk.

Home / Business and Economy / KLA Stock Surges 84% Year-to-Date: Is the Rally Sustainable?

KLA Stock Surges 84% Year-to-Date: Is the Rally Sustainable?

29 Nov

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Summary

KLA stock has achieved an 84.6% year-to-date gain.
Advanced packaging market growth targets KLA's 2025 revenue.
KLA's P/E ratio of 36.5x exceeds industry average.

KLA Stock Surges 84% Year-to-Date: Is the Rally Sustainable?

KLA has experienced an impressive surge in its stock value, boasting an 84.6% gain year-to-date and a substantial three-year total shareholder return of 210.8%. This upward momentum is largely attributed to the burgeoning advanced packaging market, characterized by the adoption of 2.5D/3D architectures and High Bandwidth Memory (HBM). KLA's revenue target for this segment in 2025 has been significantly revised upwards, indicating a belief that this trend is in its nascent stages and poised for multi-year expansion.

Despite the positive outlook, questions arise about KLA's current valuation. While one narrative suggests the stock is undervalued with a fair value of $1,287, another perspective highlights a price-to-earnings ratio of 36.5x. This figure surpasses both the semiconductor industry average of 36.1x and an estimated fair ratio of 33.1x, raising concerns about potential valuation risk.