KLA (KLAC) Stock Is Caught In A Historic Chip Equipment Losing Streak

• On 17 October 2026, chip equipment stocks including KLA (NasdaqGS:KLAC) extended a historic losing streak tied to AI spending worries.
• Traders pointed to reduced expectations for AI data center build outs as a key reason for the pressure on semiconductor equipment suppliers.
• Analysts noted that a significant portion of recent tool orders across the sector had been linked to anticipated AI infrastructure demand.
• This historic slump in chip equipment stocks tied to AI spending concerns is an important counterpoint to the rest of our view on KLA. Our analysis turns up 3 other big wins for KLA as well.

This equipment maker is one of many businesses tied to AI build out trends, so it is worth comparing it alongside 55 AI infrastructure stocks.

KLA focuses on inspection and process control tools that chipmakers use to monitor wafers, masks, and printed circuit boards, so its order book is tightly linked to how aggressively customers invest in new manufacturing capacity for AI and other data heavy computing needs.

See which insiders are buying and selling KLA following this latest news.

What this KLA selloff may be missing about the backlog story

The KLA Narrative rests on a simple idea. The business is less about quarter to quarter AI excitement and more about turning a long, contracted backlog into high margin cash flow even when sentiment cools.

"The main thing that has to go right is that KLA continues to convert its large, long dated backlog and process control share gains into high margin systems, services, and specialty process revenue..."

See how the full story points towards a $234 fair value for KLA.

The latest losing streak signals that traders are questioning how durable AI focused wafer equipment demand really is. For KLA, that pressure cuts straight across the thesis that US$12.5b of long dated orders, stretching into 2027 and 2028, can still feed high margin systems and services even when AI capex expectations are reset.

Viewed against peers like Lam Research and Applied Materials, the key difference is how much weight KLA’s story puts on process control intensity at advanced logic nodes and in AI centric memory and packaging. If that intensity and the advanced packaging ramp slow or customers push out tools, the backlog edge that investors have been paying for starts to look more fragile.

News like this only really makes sense once you have a clear view of where KLA is trying to go and which parts of its story are non negotiable.

Add KLA to your Watchlist and get alerts as these catalysts play out.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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