Yahoo Finance If You Invested $1000 in KLA a Decade Ago, This is How Much It'd Be Worth Now
How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in KLA (KLAC) ten years ago? It may not have been easy to hold on to KLAC for all that time, but if you did, how much would your investment be worth today?
KLA's Business In-Depth
With that in mind, let's take a look at KLA's main business drivers.
San Jose, CA-based KLA Corporation is an original equipment manufacturer (OEM) of process diagnostics and control (PDC) equipment and yield management solutions required for the fabrication of semiconductor integrated circuits (ICs) or chips. The company has a comprehensive portfolio of products addressing each major PDC subsegment—photomask (reticle) inspection, wafer inspection/defect review and metrology.
Reticle production is vital to the semiconductor device formation process. Reticles are used to control the precise deposition of materials onto the wafer, which ultimately change its chemical characteristics, imparting specific functionalities to the ICs thus created. Inspection and metrology tools measure the quality of the reticles, helping to improve reticle production yields. As a result of the broader applicability of semiconductors, shrinking form factors and increasing functionalities of individual chips, reticle design and production are growing in importance. Intel and Taiwan Semiconductor were the largest customers in the last three years, accounting for more than 10% of total sales in each year.
KLA reported revenues of $10.496 billion in fiscal 2023. Product revenues accounted for 79.8% while the rest came from Service segment.
KLA’s two main product lines are defect inspection and metrology. The company’s defect inspection tools have very broad application in chip, wafer, reticle, storage, compound semiconductor and MEMS manufacturing. Metrology tools are used to gather critical dimension measurements of the wafer and process dimensions such as film thickness, lithography overlay and surface profiling. The company’s metrology products are used in chip, wafer, reticle and solar device manufacturing. KLA also offers other products and services.
In addition to new tools, KLA also offers a comprehensive portfolio of refurbished tools that upgrade and improve yields of existing equipment under the KT-Certified program. Refurbished tools are currently sold to IC, reticle, substrate, MEMS and data storage manufacturers.
Although KLA is a major player in each of its served markets, it faces competition from other large equipment suppliers such as Applied Materials and Hitachi High-Technologies Corporation.
Bottom Line
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in KLA ten years ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in May 2014 would be worth $12,016.81, or a gain of 1,101.68%, as of May 29, 2024, according to our calculations. This return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 177.84% and gold's return of 79.06% over the same time frame.
Analysts are forecasting more upside for KLAC too.
KLA is benefiting from strong performance of the wafer inspection business owing to rising demand for advanced wafer inspection applications in leading-edge technology development. Growing adoption of KLA’s 8900 series platform for high throughput macro inspection, increased demand in the legacy node and advanced packaging categories made the platform one of the best performing product lines in its optical inspection portfolio in 2023. Growing investments across multiple nodes, and rising capital intensity in Foundry & Logic are driving the top-line growth. KLA's emphasis on integration of AI into its solutions has driven its outperformance in the semiconductor market. However, weakness in the PCB, Display and Component Inspection remains a headwind. Softness in memory and leading-edge, logic and foundry investments has been a concern.
The stock is up 14.05% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 8 higher, for fiscal 2024. The consensus estimate has moved up as well.
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