As previously reported, Nomura upgraded KLA-Tencor (KLAC) to Buy from Neutral with a $60 price target. Analyst Romit Shah believes consensus estimates underestimate improving cyclical trends that could drive an inflection in earnings. Shah said capital spending is shifting towards logic and KLA-Tencor recently commented that September orders would be at the upper end of its guided range due to 10nm logic. The analyst expects Intel's (INTC) spending to normalize to $75M-$100M per quarter starting in December from less than $10M in the first half of 2015. Shah sees further earnings leverage from recent headcount cuts and raised December earnings estimates to 82c from 68c and 2016 to $4.25 from $3.68.