KLA Earnings Day: Shorts Hold Firm at 18.5% of Float

KLA Corporation reported October quarter results today with short sellers still holding 18.5% of the free float, one of the heavier bearish positions across semiconductor equipment.

Short interest rose a marginal 0.6% over the past week to 24.4 million shares, a modest uptick after a month that saw positions fall roughly 16%. The month-long reduction coincided with the stock's sharp decline. KLAC closed Tuesday at $153.66, down 5% for the week and 18% for the month. That underperformance is broad relative to peers: AMAT fell 2.2% over the same five sessions, MKSI gained 0.5%, and LRCX fell 8.6%, with UCTT the outlier, up 10.2% on the day.

Borrow costs have continued climbing. The cost to borrow reached 1.47% on Tuesday, up 9% from a week earlier and more than three times September levels, when the rate spent most of the month below 0.5%. The move in cost to borrow looks episodic rather than structural: availability remains entirely loose, with roughly 1.3 billion shares available to lend against 24 million currently borrowed. There is no sign of squeeze pressure in the lending market.

The Street is broadly still constructive, but targets have been coming down. Morgan Stanley maintained its Overweight rating in early October while trimming its target from $253 to $227. The mean analyst target is $232, a significant premium to Tuesday's close of $153.66. The bull case centres on KLA's structural position in process control, rising leading-edge intensity, and management's guidance for $15 billion or more in calendar 2026 revenue. Bears point to a valuation that, even after the selloff, carries a PE near 23.6x and significant exposure to China, which accounts for over 30% of revenue. The last earnings print, in late July, saw the stock fall 16.3% on the day before recovering part of that ground over the following week.

Wikipedia attention for KLAC ran at a z-score of 1.7 above its own 90-day average as of October 21, the highest retail attention reading in recent weeks, consistent with the focus on today's report.

With results now out, the data to watch is whether short interest holds near the 18% to 19% range or begins to move materially in either direction over the sessions that follow.