Chris Lange
5 min read
Quick Read
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KLA (KLAC) turned $1,000 into about $23,300 over ten years, a 37% annualized return that crushed the S&P 500’s $3,478.
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AI demand for tighter chip inspection pushed KLA’s September quarter revenue to a record $4.1 billion, up 29%.
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Shares have dropped about 50% from their 52-week high, a reminder that timing matters even for long-term winners.
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Building a portfolio and living off one are two completely different skills, and almost nobody teaches the second. This problem is what The Definitive Guide to Retirement Income helps, and it is free today. Read more here. (Sponsor)
From Chip Inspector to AI Choke Point
Ten years ago, KLA (NASDAQ:KLAC) sold a narrow line of equipment: inspection and metrology tools that catch defects before they destroy a wafer. That segment became a choke point. Chips kept shrinking, and designs kept getting more complex, so every new node needed more process control. KLA leads that market.
The company dropped the Tencor name and became KLA Corporation in 2019. Then AI arrived. Leading-edge logic, DRAM, and advanced packaging all need tighter inspection, and management now talks about KLA’s “critical role as a key enabler of the AI ecosystem”. Revenue for fiscal 2026 came in at $13.579 billion, up 11.71%. The September quarter then set a record at $4.136 billion, up 28.86%.
A Dividend That Grew 342%
The quarterly payout was $0.52 per share in 2016. By May 2026, it had reached $2.30, a 342% increase that marked KLA’s 17th consecutive annual raise. After the 10-for-1 split in June 2026, that works out to $0.23 per share. Because the yield is only about 0.65%, nearly all of the total return came from price appreciation. The dividend was a small extra.
Your $1,000 Became $23,304
1-Year Return
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Initial Investment: $1,000
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Current Value: $1,275
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Total Return: 27.54%
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S&P 500 (same period): $1,122 (12.18%)
5-Year Return
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Initial Investment: $1,000
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Current Value: $3,929
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Total Return: 292.86%
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Annualized Return: 31.5%
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S&P 500 (same period): $1,624 (62.35%)
10-Year Return
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