[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  Jukan [@Jukanlosreve](/creator/twitter/Jukanlosreve) on x 22.8K followers Created: 2025-07-24 01:52:59 UTC KLA: Focusing on DRAM Upside Potential, 2026 Could Be a Key Year for Valuation Revisions Morgan Stanley (S. Brett, 2025/07/20) Morgan Stanley notes that while KLA's September quarter guidance was slightly better than market expectations, it wasn't a substantial catalyst. Market focus has shifted to the strength of DRAM-driven demand in the second half of the year and its potential impact on upward revisions to 2026 forecasts. September Quarter Guidance Slightly Raised, Meets Expectations but Unlikely to Be a Valuation Catalyst KLA expects September quarter revenue to see a low single-digit sequential increase (approx. $XXX billion), which is better than the market's expectation of a X% sequential decline but broadly in line with buyer expectations. As the market generally anticipated China and DRAM to drive second-half growth, the current guidance is unlikely to lead to further valuation re-rating. DRAM is the Market Focus, Determining the Upside for 2026 Earnings Revisions Morgan Stanley believes that the market will not reward valuation increases driven by China, but it will react positively to DRAM-led growth. SK Hynix might be a major client in the second half. If its spending is for improving yields on existing production lines (rather than new capacity builds), it would resemble TSMC's strategy of reinvesting in older process nodes. Declining Yields Drive Demand for Process Control, KLA Benefits Significantly The application of EUV and HBM in DRAM is lowering yields, prompting manufacturers to increase investment in process control. KLA notes that the intensity of process control in DRAM has increased from 8-9% to 9-10%. This is expected to further increase by 100-200 bps with higher HBM penetration, which is favorable for its product demand. Decreased DRAM Output Efficiency Further Boosts Demand for KLA DRAM bit output per wafer is estimated to decline year-over-year in 2024, marking the first such decrease since 2012. This is mainly due to yield issues at EUV nodes and low HBM die utilization (estimated die discount of 3x in 2024, reducing bit output by 8%). Manufacturers need to either improve yields or expand capacity, both of which present opportunities for KLA. 2025 Market Share Expected to Rise, 2026 Forecast Remains Conservative Institutions expect KLA's DRAM revenue to grow by XX% year-over-year in 2025, significantly higher than the industry's +5% increase, with market share rising from XXX% to 7.4%. The preliminary forecast for 2026 is a X% year-over-year decline, but the risk is skewed to the upside. If the order structure proves favorable, there's potential for upward revisions to the outlook.  XXXXX engagements  **Related Topics** [dram](/topic/dram) [morgan stanley](/topic/morgan-stanley) [stocks financial services](/topic/stocks-financial-services) [Post Link](https://x.com/Jukanlosreve/status/1948199700701859947)
[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]
Jukan @Jukanlosreve on x 22.8K followers
Created: 2025-07-24 01:52:59 UTC
KLA: Focusing on DRAM Upside Potential, 2026 Could Be a Key Year for Valuation Revisions Morgan Stanley (S. Brett, 2025/07/20)
Morgan Stanley notes that while KLA's September quarter guidance was slightly better than market expectations, it wasn't a substantial catalyst. Market focus has shifted to the strength of DRAM-driven demand in the second half of the year and its potential impact on upward revisions to 2026 forecasts.
September Quarter Guidance Slightly Raised, Meets Expectations but Unlikely to Be a Valuation Catalyst KLA expects September quarter revenue to see a low single-digit sequential increase (approx. $XXX billion), which is better than the market's expectation of a X% sequential decline but broadly in line with buyer expectations. As the market generally anticipated China and DRAM to drive second-half growth, the current guidance is unlikely to lead to further valuation re-rating.
DRAM is the Market Focus, Determining the Upside for 2026 Earnings Revisions Morgan Stanley believes that the market will not reward valuation increases driven by China, but it will react positively to DRAM-led growth. SK Hynix might be a major client in the second half. If its spending is for improving yields on existing production lines (rather than new capacity builds), it would resemble TSMC's strategy of reinvesting in older process nodes.
Declining Yields Drive Demand for Process Control, KLA Benefits Significantly The application of EUV and HBM in DRAM is lowering yields, prompting manufacturers to increase investment in process control. KLA notes that the intensity of process control in DRAM has increased from 8-9% to 9-10%. This is expected to further increase by 100-200 bps with higher HBM penetration, which is favorable for its product demand.
Decreased DRAM Output Efficiency Further Boosts Demand for KLA DRAM bit output per wafer is estimated to decline year-over-year in 2024, marking the first such decrease since 2012. This is mainly due to yield issues at EUV nodes and low HBM die utilization (estimated die discount of 3x in 2024, reducing bit output by 8%). Manufacturers need to either improve yields or expand capacity, both of which present opportunities for KLA.
2025 Market Share Expected to Rise, 2026 Forecast Remains Conservative Institutions expect KLA's DRAM revenue to grow by XX% year-over-year in 2025, significantly higher than the industry's +5% increase, with market share rising from XXX% to 7.4%. The preliminary forecast for 2026 is a X% year-over-year decline, but the risk is skewed to the upside. If the order structure proves favorable, there's potential for upward revisions to the outlook.
XXXXX engagements
Related Topics dram morgan stanley stocks financial services