KLA's Latest Launch Gets Thumbs Up From Analyst; Micron's Deteriorating Fundamentals Leads To Re-Rating

Wells Fargo analyst Joseph Quatrochi maintained KLA Corp KLAC with an Overweight and raised the price target from $360 to $420.
Post-market close on December 6, KLA launched the Axion T2000 metrology system, which leverages x-ray to measure complex vertical structures of advanced memory chips.
KLA highlighted multiple systems in operation at leading memory customers for 3D NAND and DRAM.
The company highlighted that the Axion T2000 could be used in R&D to achieve fast learning cycles, reducing dependence on the long lead time and destructive measurement methods and accelerating ramp cycle time.
Quatrochi believes KLA should trade at a premium to Applied Materials, Inc AMAT and Lam Research Corp LRCX, given a greater than 60% share of the addressable market and a higher gross and EBIT margin structure.
Wells Fargo analyst Aaron Rakers maintained Micron Technology Inc MU with an Overweight and lowered the price target from $75 to $70.
Rakers would not be surprised to see MU shares trade lower ahead of the upcoming F1Q23 earnings release.
Weakening fundamentals leave the analyst to now model non-GAAP EPS losses through F2023, down-cycle bottom shifting to mid and 2H2023 vs. prior 1H2023 expectation.
Price Action: KLAC shares traded higher by 1.38% at $388.52 on the last check Wednesday.

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