KLA Corp (KLAC) Surges 4.5% on Jefferies Upgrade: Is This the Start of a New Bull Run?

Summary
• Jefferies upgrades KLA to Buy with a $1,500 price target, a 36% jump from previous levels.
• Micron Technology’s upbeat forecast fuels broader chip sector optimism.
• KLA’s stock trades near 52-week high of $1,284, up 92% year-to-date.

KLA Corporation (KLAC) has surged 4.5% to $1,224.9, driven by a Jefferies upgrade and renewed AI infrastructure demand. The stock’s intraday range of $1,211–$1,233 reflects strong buying pressure amid a sector-wide rally. Analysts highlight KLA’s critical role in AI-driven semiconductor manufacturing, with Jefferies and TD Cowen raising price targets to $1,500 and $1,300, respectively.

Jefferies' Bold Move Ignites KLA's Rally
KLA’s 4.5% surge stems from Jefferies’ upgrade to Buy and a $1,500 price target, signaling confidence in AI infrastructure demand. The firm cited KLA’s 'outsized exposure' to leading-edge and packaging sectors, where AI complexity drives demand for inspection and process control solutions. Micron Technology’s strong forecast for memory chips further bolstered sentiment, as investors rotated into companies with sustainable demand. KLA’s recent fiscal Q1 results—$3.21B revenue and $8.81 non-GAAP EPS—underscored its robust cash flow and margins, reinforcing analyst optimism.

Semiconductor Sector Gains Momentum as KLA Leads AI Infrastructure Charge
The semiconductor sector, led by KLA and Applied Materials (AMAT), is surging on AI-driven demand. AMAT, a sector leader, rose 2.45% today, reflecting shared tailwinds from advanced packaging and logic node investments. KLA’s 4.5% gain outpaces the S&P 500’s 1.01% rise, highlighting its leveraged position in AI infrastructure. While memory and logic chips face cyclical risks, KLA’s mission-critical equipment for AI manufacturing positions it to outperform peers in the long term.

Options and ETFs to Watch: Capitalizing on KLA's Volatility
• 200-day average: $917.28 (well below current price)
• RSI: 52.42 (neutral, suggesting potential for further gains)
• MACD: 15.75 (bullish divergence from signal line at 17.66)
• Bollinger Bands: Upper at $1,272.29, Middle at $1,185.76, Lower at $1,099.23

KLA’s technicals suggest a continuation of its bullish trend. The stock is trading above its 200-day MA and within the upper Bollinger Band, indicating strong momentum. A 5% upside to $1,286 would test the 52-week high of $1,284, offering a clear target for short-term traders. The XLK ETF (Semiconductor Select Sector SPDR) could serve as a leveraged play, though no specific ETF data is provided here.

Top Options Contracts:
• KLAC20261218C1270 (Call, Strike: $1,270, Expiry: 2026-12-18):
- IV Ratio: 0.07% (extremely low, suggesting undervaluation)
- Leverage Ratio: 244,820% (astronomical, indicating deep out-of-the-money status)
- Delta: 0.0167 (minimal price sensitivity)
- Theta: -0.0020 (slow time decay)
- Gamma: 0.0500 (moderate sensitivity to price changes)
- Turnover: 0 (no liquidity)
- Payoff at 5% Upside: $12.6 (max(0, 1286 - 1270))
- Why it stands out: Despite its extreme leverage ratio, this call is deeply out-of-the-money and offers minimal directional exposure. Its low IV suggests it’s undervalued, but liquidity issues make it impractical for most traders.

• KLAC20261218C1270 (No alternative contract provided in data)

Trading Insight: Aggressive bulls may consider KLAC20261218C1270 if liquidity improves, but the lack of turnover and extreme leverage ratio make it a speculative bet. A safer approach is to monitor KLA’s ability to hold above $1,222 (30D support) and retest the $1,272 upper Bollinger Band.

Backtest KLA Stock Performance
The performance of KLA (KLAC) after an intraday surge of 5% from 2022 to the present has shown mixed results based on different time frames:1. Short-Term Backtest (2022 to 2024): - 2023 Peak and Subsequent Decline: KLAC peaked at $1,284.47 in 2023, reflecting strong performance amid sector growth. However, the stock faced a significant correction, dipping to $1,170.45 by 2024, amid sector-wide volatility. - 2024 Recovery: KLAC rebounded to $1,239.65 by late 2024, showing resilience amid AI-driven demand and supply chain challenges.2. Medium-Term Backtest (2022 to 2025): - 2025 Volatility: KLAC experienced heightened volatility, with a 4.19% drop in December 2025 amid sector turbulence. This aligns with broader semiconductor sector pressures and AI-driven demand. - Support Levels: The stock’s support level at $1,170 is critical, as it represents a 7.5% premium above the Bollinger Bands and is near its 30-day moving average.3. Long-Term Outlook: KLAC’s long-term fundamentals remain strong, supported by its role in wafer fabrication equipment and AI-driven demand. The company’s process control systems are viewed as resilient to pricing pressure, and its yield management systems are critical for semiconductor customers.In conclusion, while KLAC showed strong growth from 2022 to 2023, it faced significant volatility and corrections by 2024. The recent 5% intraday surge in 2025 reflects broader sector dynamics and AI-driven demand. Investors should monitor the $1,170 support level and the stock’s ability to sustain its recent gains amid sector-wide challenges.

Act Now: KLA's AI-Driven Momentum Could Define 2026
KLA’s 4.5% rally on Jefferies’ upgrade and AI infrastructure demand signals a potential breakout. The stock’s technicals—above 200-day MA and within a bullish MACD divergence—support a continuation of its trend. However, a breakdown below $1,222 (30D support) could trigger a pullback toward $1,099 (lower Bollinger Band). Investors should watch for a sustained close above $1,272 to confirm a new uptrend. Meanwhile, sector leader Applied Materials (AMAT) rose 2.45%, reinforcing the sector’s strength. Act now: Position for a test of $1,284 or tighten stops below $1,211 to lock in gains.