Deutsche Bank analysts provided their outlook on KLA Corporation (NASDAQ:KLAC) ahead of the Q2 earnings announcement.

The analysts expect Q2 results and Q3 guidance to be generally in line with current Street estimates, as the company should continue to see revenue support from its large RPO balance (approximately $13.7 billion exiting Q1) and potential upside to the expected revenue impact from export restrictions on tool reallocations.

However, incrementally to order pushouts/cancellation by memory customers, the analysts view TSM's CAPEX guidance for 2023 (down 6% year-over-year at the midpoint) and persisting capacity underutilization at the leading edge as a tough setup for foundry/logic into the second half of 2023, where KLA is over-indexed.