By Emily Dattilo
The semiconductor equipment sector is tracking toward a mid-cycle correction in the second half of next year, Citi said.
"While server AI demand remains strong, consumer demand across PCs, smartphones, and auto appears lackluster," analysts Atif Malik and Yiing Sun wrote on Sunday.
The team cut their price targets on shares of Applied Materials to $217 from $240, KLA Corp. to $900 from $960, and Lam Research to $893 from $990. Citi reiterated a Buy rating on all three stocks.
In premarket trading, Applied Materials stock was down 1.8% to $185, KLA slipped 1.5% to $740.51, and Lam stock dipped 2% to $754.49.
Though there are headwinds in the first half of 2025, the Citi team remains positive on growth drivers. It prefers the trio of semiconductor equipment stocks thanks to the group's higher exposure to foundry and logic sales, which is forecast to grow the fastest next year.
Write to Emily Dattilo at emily.dattilo@dowjones.com
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(END) Dow Jones Newswires
September 16, 2024 08:47 ET (12:47 GMT)
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