KLA-Tencor shares tumbled 8.16% in after-hours trading on Tuesday, reversing early gains following the release of its fiscal fourth-quarter earnings report. The stock initially rose after the results were announced but quickly lost momentum as investors digested the company’s forward-looking earnings guidance.

The semiconductor equipment maker reported fiscal Q4 revenue of $3.66 billion, beating analyst estimates of $3.60 billion, and adjusted earnings per share of $1.05, above the consensus of $1.00. For the upcoming first quarter, KLA forecast revenue of $4.0 billion, plus or minus $200 million, exceeding Wall Street's estimate of $3.92 billion. However, the company’s GAAP diluted EPS outlook of $1.14, plus or minus $0.10, appeared to disappoint investors who had been expecting stronger bottom-line growth, triggering the sharp after-hours sell-off.

The decline was compounded by the stock’s already elevated valuation and a broader sell-off in the semiconductor equipment sector during the regular session, where KLA had fallen over 6% intraday. Despite management’s upbeat commentary on accelerating momentum driven by AI infrastructure demand and advanced packaging opportunities, the cautious EPS forecast fueled profit-taking after a strong run-up in the stock earlier this year.