Jefferies lifts KLA to Buy on AI-led leading-edge and packaging demand

Investing.com -- Jefferies upgraded semiconductor equipment maker KLA Corp. to Buy in a note to clients on Monday, citing accelerating AI-driven spending and a stronger outlook for leading-edge and advanced packaging demand.

In its 2026 outlook, Jefferies said “AI remains our favorite group” as hyperscaler capital expenditure accelerates and ASIC adoption inflects, driving a multi-year runway for semiconductor capital equipment.

Against that backdrop, Jefferies is “upgrading KLAC to Buy on stronger Leading edge/packaging outlook,” while maintaining a constructive view on wafer fab equipment (WFE) growth into 2026 and 2027.

Jefferies noted that “AI continues to drive spend with WFE accelerating into C26/C27,” supporting higher demand across leading-edge foundry, memory and packaging.

The firm highlighted KLA’s “outsized exposure to the Leading Edge,” arguing that the company is well-positioned as AI pushes capacity additions starting in the second half of 2026.

As part of the upgrade, Jefferies raised its price target on KLA to $1,500, based on “30x C28 EPS of $50,” and said the stock has seen a “recent relative multiple reset as premium closing vs peers.”

Jefferies also lifted its revenue forecasts, raising estimates to $14.0 billion for 2026 and $15.5 billion for 2027, above Street expectations.

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