Strong AI Tailwinds Lift KLAC Despite Ongoing China Export Risks

KLA Corporation (NASDAQ:KLAC) is included among the 20 Best Performing Dividend Stocks in 2025.

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KLA Corporation (NASDAQ:KLAC) is up nearly 97% since the start of 2025. Analyst sentiment has followed that move. Jefferies upgraded the shares to Buy and lifted its price target to $1,500. Oppenheimer kept an Outperform rating and set a $1,400 target. Those calls helped reinforce momentum and pushed investor confidence higher.

The broader backdrop has also helped. SEMI expects semiconductor equipment sales to hit a record in 2025, driven largely by AI-related investment. Those macro tailwinds fueled a rally across the sector, lifting many equipment names at the same time.

Earlier in October, KLA Corporation (NASDAQ:KLAC) forecast second-quarter revenue above Wall Street estimates. Management pointed to strong AI-linked demand for its chipmaking tools, while also calling out growing risks tied to its China exposure amid ongoing US–China trade tensions.

Demand for advanced chips that support generative AI workloads has continued to climb. That trend benefits niche suppliers like KLA, whose equipment is used inside semiconductor manufacturing facilities, commonly known as fabs.

Trade policy remains a clear headwind. KLA expects US export restrictions to reduce sales by $300M to $350M over the next five quarters. The company said this reflects “additional market access loss related to certain customers in China resulting from extended export controls from the U.S. government,” according to a letter to shareholders.

KLA Corporation (NASDAQ:KLAC) is based in Milpitas, California. The company designs wafer fab equipment and supplies process control and yield management systems used across the semiconductor industry.

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