The demand for NAND structure is being driven by AI smart bodies! Citibank raises the target prices for Applied Materials (AMAT.US), Lam Research Corporation (LRCX.US), and KLA Corporation (KLAC.US).

Citigroup Inc. raised the target prices for semiconductor equipment manufacturers Applied Materials (AMAT.US), Lam Research Corporation (LRCX.US), and KLA Corporation (KLAC.US), and expressed strong optimism for the outlook for NAND device demand. On Wednesday before the U.S. stock market opened, Applied Materials' stock price rose by 4%, while KLA Corporation and Lam Research Corporation both saw increases of over 3%. The institution pointed out that the increasing gap between the demand for DRAM and available supply is driving the adoption of supplemental solutions such as key value (KV) cache offload. A Citi analyst stated, "We currently expect that in the optimistic scenario, the global wafer fab equipment market size will reach approximately $145 billion, $200 billion, and $250 billion in 2026, 2027, and 2028, respectively, indicating a robust growth of 25% in 2028. Given the capacity constraints and expansion plans faced by Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR and memory chip manufacturers, as well as recent developments at Intel Corporation and Samsung foundries, we hold a more positive outlook for the wafer fab equipment market in 2028." Citi stated that the rise of Agentic AI is leading to "structural growth" in NAND demand, as the increasing need for memory is putting pressure on the supply of DRAM. "Multi-step reasoning workflows are rapidly expanding the footprint of key-value caches, causing total memory requirements to far exceed the efficient support range of high-cost HBM and DRAM, especially in environments of restricted DRAM supply and high prices... This does not imply a weakening of demand, but rather highlights the widening gap between required memory and available memory. Therefore, we see major companies accelerating the adoption of supplemental solutions, such as key value cache offload - moving intermediate model states to a storage layer with lower cost and higher capacity." Additionally, Citi pointed out that with the continuous innovation of high-performance NAND like HBF and XL-Flash, this shift represents a structural positive for NAND demand. Whether in cloud computing or edge applications, there is increasing reliance on NAND to expand capacity, control costs, and support the increasingly complex workloads of Agentic AI. Performance Guidance Looking ahead, Citi introduced performance forecasts for Applied Materials, Lam Research Corporation, and KLA Corporation in the 2028 calendar year for the first time, and raised their target prices based on their earnings potential in the 2028 calendar year. Applied Materials: Citi raised its target price from $550 to $710. The institution simulates that its total revenue in 2027 and 2028 calendar years will increase by 30% and 22% year-on-year, with growth of 35% and 25% in the semiconductor processing sector, and 14% and 13% in the global service support sector. Lam Research Corporation: Analysts raised their target price from $315 to $450. "We expect its total revenue in 2027 and 2028 calendar years to increase by 28% and 22% year-on-year, with growth of 36% and 25% in the wafer manufacturing equipment systems, and 12% and 13% in customer support." KLA Corporation: The investment institution expects its total revenue in 2027 and 2028 calendar years to increase by 24% and 22% respectively. Growth of 28% and 25% is projected in the semiconductor process control systems, 14% and 14% in the semiconductor process control services, and 15% and 15% in the electronic packaging and component businesses. Citi raised its target price from the previous $206.4 to $290, based on a 40 times price-earnings ratio for the 2028 calendar year.