Valuation Compression Pulls Down KLA (KLAC) Despite Raised Outlook

What happened: Bristol Gate Capital Partners said KLA Corporation (NASDAQ:KLAC) and Applied Materials were the largest detractors in its US Equity Strategy in Q3 2026, even though KLA beat expectations and raised its view of the 2026 wafer-equipment market. Key numbers: KLA fell 35.3% and Applied Materials fell 29.2% Why it matters: Bristol Gate said analysts raised earnings estimates for both companies over the quarter, so the declines reflected lower valuations rather than weaker expectations. The firm said the names were trimmed at the end of June after significant second-quarter gains. Market: +1.2% today ($222.52), +21.0% YTD, 0.1x vol — as of 15:33 UTC

Bristol Gate Capital Partners said KLA Corporation (NASDAQ:KLAC) and Applied Materials were the largest detractors in its US Equity Strategy in Q3 2026, even though KLA beat expectations and raised its view of the 2026 wafer-equipment market.

Bristol Gate said analysts raised earnings estimates for both companies over the quarter, so the declines reflected lower valuations rather than weaker expectations. The firm said the names were trimmed at the end of June after significant second-quarter gains. Market: +1.2% today ($222.52), +21.0% YTD, 0.1x vol — as of 15:33 UTC