KLA Corporation Stock Fell 7% This Week Right After Its 10-for-1 Split. Here’s Where the Stock Could Go in 2026

Key Stats for KLA Corporation Stock

• Current Price: $237.33
• Target Price (Mid): ~$350
• Street Target:~$194
• Potential Total Return: ~48%
• Annualized IRR: ~10% / year
• Earnings Reaction: −3.63% (April 29, 2026)

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What Happened?

The mood around KLAC stock in 2026 flipped in one session. After a powerful run into one of the year’s most anticipated splits, KLA Corporation (KLAC) fell 7.44% on June 16 to close at $237.33. Bulls call the pullback noise on top of a structurally irreplaceable business. Bears say the stock ran too far, too fast. The question investors are searching for now: was the drop a warning, or a gift?

Why KLA Sold Off Right After Splitting Its Stock

KLA’s 10-for-1 forward stock split took effect June 12. The session before, shares surged more than 12% to fresh highs on a wave of analyst target hikes. A split changes nothing about the business. It lowers the per-share price. So the selloff that followed was about positioning, not fundamentals.

Three things converged. Traders booked gains after a rally of more than 100% over the trailing year. Options sentiment turned defensive, with data from June 15 showing traders picking up 39,161 put contracts, a 1,456% surge above the daily average. And insider selling drew headlines, as CEO Richard Wallace sold roughly $10 million in stock around the split.

That last point reads worse than it is. The sale ran through a Rule 10b5-1 plan Wallace adopted on November 19, 2025, which pre-schedules trades and strips out short-term timing. The cleaner read is mechanical unwinding. The capital-return backdrop, including a 21% dividend increase and a $7 billion buyback, is in KLA’s investor relations materials.

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Was the Reaction Rational?

Partly. The trigger was technical, not bad news. But the bears point at something real: valuation. KLA trades at an NTM P/E of 49.87x and a trailing P/E of 67.18x. Those are rich multiples for a business tied to a cyclical end market.

The clearest signal sits in the analyst data. The Street’s mean target is around $194, below the $237.33 close, so the average analyst sees downside from here. The breakdown runs 13 Buys, 5 Outperforms, 11 Holds, 1 Underperform, and 1 Sell. Ratings skew positive on direction, but the targets say price has outrun fundamentals.

What keeps bulls engaged is the franchise, and management made that case this month. At the Bank of America Global Technology Conference on June 3, CFO Bren Higgins said, “The year is shaping up to be a very good one for the company and for the industry on top of a couple of good years.” That frames demand as broad and multi-year, not a one-quarter spike. He put 2026 wafer fab equipment, the tools chipmakers buy to build chips, at “$140 billion plus.” KLA also gained 80 basis points of process control share and now runs 7.5 times its nearest competitor. Process control intensity rises as chips get more complex, because bigger, more valuable chips make defects costlier, so customers inspect more.

Is KLA Undervalued Today?

Not on the surface. KLA is the most expensive major name in its group, and that is the heart of the debate. On the TIKR Competitors page, it trades at 41.29x NTM EV/EBITDA, roughly level with Lam Research at 41.91x but well above Applied Materials at 32.86x and ASML at 35.73x.

Is the premium earned? It is defensible, not cheap. Service is about a quarter of revenue and largely contracted, which makes KLA’s cash flows steadier than peers leaning on etch and deposition gear. But that assumes the AI capital cycle keeps building. At these multiples, the stock is priced for execution, not surprises.

The bigger overhang is China. KLA booked $4,042.57 million in China revenue in fiscal 2025, about 33% of the total, and tightening U.S. export controls are expected to cost several hundred million dollars this year. Management says it is contemplated in guidance. Further tightening would hit a meaningful slice of the base.

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TIKR Advanced Model Analysis

• Current Price: $237.33
• Target Price (Mid): ~$350
• Potential Total Return: ~48%
• Annualized IRR: ~10% / year

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The model rests on two revenue CAGR drivers: rising process control intensity across AI-era logic, high-bandwidth memory, and advanced packaging, plus steady share gains of near 50 basis points a year. The margin driver is gross margin moving from 62% toward management’s 63% to 64% target. The primary risk is China’s export controls layered on multiple with little cushion. Upside: if the cycle runs as long as management’s $215 billion 2030 framework implies, earnings compound past the mid-case and the stock re-rates. Downside: a reset toward the Street’s sub-$200 target if growth cools.

Conclusion

Watch the fiscal Q4 2026 report on July 30 for one number: KLA guided to $3.575 billion in revenue. A print at or above that, with signs that second-half supply constraints are easing, validates the back-half ramp that the thesis rests on. A miss hands the bears their valuation case. The post-split drop looks more like positioning than a fundamental warning, but at 49x forward earnings with the Street target below the price, this is a high-quality business priced for everything to go right.

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Should You Invest in KLA Corporation?

The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.

Pull up KLA Corporation, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.

You can build a free watchlist to track KLA Corporation alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!