KLA's (KLAC) upcoming earnings are expected to show continued strength in artificial intelligence-related semiconductor infrastructure demand, Oppenheimer said in a Q4 preview Thursday.

The company is scheduled to report fiscal Q4 earnings on July 28.

The analysts said they expect the results to highlight the ongoing divide in AI spending, with semiconductor infrastructure remaining supply-constrained as capacity plans expand, while legacy software and services face budget reallocation.

However, semiconductor equipment guidance remains tied to hyperscaler capex plans, which have quadrupled since 2024 to more than $1 trillion by 2027 and are increasingly debt financed, leaving the group exposed to shifts in AI funding and return-on-investment debates, the analysts added.

The analysts said that despite KLA shares being up 85% year to date and trading at a premium valuation, they "expect continued volatility, but see the recent ~25% pullback as a buyable dip on future upward revisions and a rising scarcity premium as AI leadership narrows."

Oppenheimer raised its price target on KLA to $260 from $200 and has an outperform rating on the stock.

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