BlockBeats News, June 18th. Semiconductor equipment stocks strengthened in the U.S. stock market on Wednesday as Citi raised its price targets for Applied Materials, Lam Research, and KLA and maintained a buy rating, stating that capital expenditure on AI by large tech companies is still being upwardly revised.

Citi analyst Atif Malik raised the price target for Applied Materials from $550 to $710, Lam Research from $315 to $450, and KLA from $206.40 to $290. According to Investor's Business Daily, Applied Materials closed up 4.4% on Wednesday, hitting a new intraday high, while Lam Research also briefly hit a new high.

This report is seen by the market as a repricing of the wafer fabrication equipment market. Citi expects that driven by AI computing power, expanded storage, and advanced process investments, the global WFE market size may increase from $145 billion in 2026 to $200 billion in 2027 and reach $250 billion in 2028.

For the Asian market, this logic directly translates to semiconductor equipment, advanced packaging, expanded storage, and fab capital expenditure. Previously, the market focused more on GPUs and server hardware, but now sellers are spreading the prosperity of the AI industry chain to the "equipment that manufactures AI chips" itself.

The risk lies in the fact that equipment stocks have already risen significantly, and valuations are highly sensitive to capital expenditure expectations. If cloud providers' AI spending slows down or storage manufacturers' production expansion discipline strengthens again, the profit elasticity on the equipment side may also be inversely magnified.