Citi ups KLA Corp. target, names top pick in semiconductor equipment

Citi analyst Atif Malik raised the firm’s price target on KLA Corp. to $980 from $760 and keeps a Buy rating on the shares. The analyst believes the semiconductor equipment group is in “late Phase 2 stage” following the year-to-date share outperformance relative to the S&P 500 Index. The firm has become more selective on the group, saying its 2025 wafer fab equipment sensitivity analysis shows balanced risk/reward profiles. Citi maintains its 2025 base case wafer fab equipment spend estimate of $120B, above the Street at $116B, with a bull case of $130B on a step up in spend by the China Big Fund. The firm still prefers manufacturers to wafer starts-driven stocks, moving KLA Corp. (KLAC) to its top pick, citing the company’s “outsized” leading-edge WFE spend exposure, which is expected to grow mid to high teens in 2025, and management’s confidence in the 2026 target model.