KLA Corporation closed Tuesday at $1,811.35. That is still 4.5% ahead of where it started the week. A wave of post-earnings analyst upgrades has validated the bull case. At the same time, short sellers have moved with conviction in the opposite direction — cutting exposure fast.
The analyst response to KLA's April 29 earnings was unusually unanimous. Nearly every firm covering the stock raised its price target in the two days after the print. JP Morgan lifted its target from $1,950 to $2,000 while holding Overweight. Wells Fargo went further, pushing its target to $2,100. Citigroup raised to $2,064 on May 1, the last of the post-earnings revisions. Even the more cautious voices moved: both Susquehanna and RBC Capital lifted targets from $1,600 to $1,700, maintaining Neutral and Sector Perform respectively. The mean consensus target now sits at $1,852 — roughly 2% above current price — suggesting the Street has mostly priced in the good news. The analyst recommendation differential ranks in the 9th percentile, reflecting relatively limited upside implied by the current consensus distribution.
Short sellers have responded to that re-rating by stepping back sharply. Short interest fell nearly 14% over the week, dropping from roughly 3.47 million shares to around 2.99 million. As a percentage of the free float, that puts SI at 2.3% — light by any measure, and well short of territory that would flag any kind of squeeze dynamic. The borrow market underscores how uncrowded the short side is. Availability remains very wide, and cost to borrow has edged up about 23% over the week to 0.44% annualised — a noticeable move in percentage terms, but still essentially free money. The ORTEX short score has drifted lower all week, from 34.9 to 33.3, reinforcing the picture of a short base in retreat rather than building. Days to cover is 2.7 — the position could be unwound in under three sessions even on normal volume.
Options positioning adds a modest note of caution that sits in contrast to the short covering. The put/call ratio is running at 1.43, slightly above its 20-day average of 1.37 and about one standard deviation above the mean. This is far from extreme — the 52-week high on the PCR is 2.02 — but it does suggest options traders are carrying more downside protection than usual heading into the summer. Tuesday's 1.8% pullback came on a day when close peers AMAT and LRCX both gave back around 2.5-2.8%, keeping KLAC largely in line with the group. ONTO and CAMT fared considerably worse on the day and on the week, making KLA's relative performance look measured rather than exceptional.
The institutional picture is broadly supportive without being remarkable. Vanguard and BlackRock together hold just over 20% of shares, with BlackRock adding roughly 537,000 shares in the most recent reported quarter. T. Rowe Price added about 1.2 million shares as of March 31, one of the larger disclosed additions in the top-15 holder list. On the other side of the ledger, CEO Richard Wallace sold 4,512 shares on May 12 for approximately $8.1 million. That follows a director sale and the CFO's earlier disposal — all routine-looking in scale, and the significance scores on each transaction are low. Net insider activity over the past 90 days is a small positive in share terms, though the dollar value of recent sales is notable in absolute terms given the stock's price level.
Valuation multiples have been broadly stable. The trailing PE is 43.5x, down fractionally over the week. EV/EBITDA has drifted lower over the past 30 days, now at 35.0x versus 37.3x a month ago — compression consistent with earnings expectations rising faster than the stock. The dividend score ranks in the 99th percentile, reflecting KLA's unusually consistent shareholder return record; note that the dividend history in the available data runs only to 2022, so the current yield of approximately 0.46% should be treated as an estimate based on more recent data points.
The next scheduled earnings event is July 28. Between now and then, the question is whether the semiconductor equipment cycle narrative — which powered the post-earnings target hikes — holds up as macro conditions shift. KLA's bear case centres on the risk of foundry spending cuts from TSMC and Samsung; the bull case rests on process control being a non-discretionary spend for advanced node yields. That debate, rather than any short squeeze or positioning extreme, is the one to watch.
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