--- title: "3 Semiconductor Stocks to Buy After the Selloff — Bank of America’s Picks" type: "News" locale: "en" url: "https://longbridge.com/en/news/293509500.md" description: "Bank of America recommends buying semiconductor equipment stocks Applied Materials, Lam Research, and KLA following a recent selloff. The bank views the pullback as a buying opportunity, citing accelerating chip equipment spending expected to grow from $144 billion in 2026 to $250 billion by 2028. Despite market fears regarding memory price peaks and cheaper Chinese AI models, BofA highlights strong forward visibility and demand drivers like high-bandwidth memory, maintaining Buy ratings with significant upside targets for all three companies." datetime: "2026-07-22T18:25:49.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/293509500.md) - [en](https://longbridge.com/en/news/293509500.md) - [zh-HK](https://longbridge.com/zh-HK/news/293509500.md) --- # 3 Semiconductor Stocks to Buy After the Selloff — Bank of America’s Picks Three of the most important stocks in the artificial intelligence trade all set record highs on the same day, June 30. Three weeks later, they are down as much as 28%. Bank of America thinks that drop is the reason to buy them. The bank told clients on Wednesday that the pullback in **Applied Materials Inc.** (NASDAQ:AMAT), **Lam Research Corp.** (NASDAQ:LRCX) and **KLA Corp.** (NASDAQ:KLAC) is an entry point rather than a warning, because the machines these three companies sell are heading into their biggest spending wave in decades. Bank of America analyst Vivek Arya expects wafer fab equipment spending, the total the industry lays out on those machines each year, to climb from roughly $144 billion in 2026 to about $250 billion by 2028. That is growth of close to 30% a year, with the bank arguing that rising equipment prices could add another 10% on top. ## So Why Did These Stocks Fall so Hard? The three trade almost in lockstep with memory-chip makers, and investors got spooked by two fears at once: that memory prices were about to peak, and that cheaper Chinese AI models would let data centers spend less on hardware. All three peaked on June 30. In the three weeks since, Applied Materials has fallen about 23%, Lam Research about 27% and KLA about 28%. But the order books were moving the other way. Bank of America called the selloff “an enhanced buying opportunity,” pointing to more than two years of forward visibility, a wave of new chip factories coming online, and demand drivers like high-bandwidth memory, the stacked memory chips that feed AI accelerators, and gate-all-around transistors, the next design shift in leading-edge chips. Here is how the bank frames each of its three picks, alongside where Wall Street stands today. **Read Also: Nvidia vs. AMD: The Next AI Battle Targets a $170 Billion Prize** ## Applied Materials: The Broadest Bet On The Cycle Applied Materials is the largest and most diversified name in the group, which gives it exposure to nearly every corner of the upcycle. BofA’s Arya flags its leading share of about 20% in DRAM equipment, the memory now becoming the industry’s main bottleneck as AI demand strains supply. Yet the stock trades at roughly 28 times next year’s earnings, close to its widest discount to peers in five years. Bank of America rates it Buy with a $720 price target, about 29% above the current $556.24. According to Benzinga Analyst Ratings, the consensus on Applied Materials is a Buy, with an average price target of $631.56. That implies roughly 14% upside from the current price, with the Street-high target sitting at $900. **Applied Materials — Recent Analyst Actions** Date Firm Price Target Action Rating Jul 15, 2026 UBS $570 → $705 Maintains Buy Jul 10, 2026 Needham $530 → $740 Maintains Buy Jun 30, 2026 Susquehanna $575 → $900 Maintains Positive Jun 29, 2026 Cantor Fitzgerald $650 → $850 Maintains Overweight Source: Benzinga Analyst Ratings ## **Lam Research: The Etch And Deposition Leader** Lam Research is the through-cycle share gainer in etch and deposition, the steps that carve and layer the microscopic structures inside a chip. Arya said it is best positioned for a coming wave of new NAND flash-memory capacity. Bank of America keeps a Buy and a $480 target, about 51% above $317.06. The Street’s average target on Lam Research sits at $329.19 per Benzinga Analyst Ratings, also a consensus Buy, though that blended figure lags recent calls that reach a $500 Street-high. Evercore ISI issued the latest update, lifting its target to $355. Date Firm Price Target Action Rating Jul 20, 2026 Evercore ISI $300 → $355 Maintains Outperform Jul 10, 2026 Stifel $325 → $425 Maintains Buy Jun 30, 2026 Susquehanna $385 → $475 Maintains Positive Jun 29, 2026 Cantor Fitzgerald $425 → $500 Maintains Overweight _Source: Benzinga Analyst Ratings_ ## KLA: The Compounder Bank Of America Says Is Too Cautious KLA leads in process control, the inspection and measurement tools that catch defects before they ruin a wafer. Arya called it a “compounder at cusp of acceleration” and said its high-teens full-year sales guidance looks conservative. Bank of America rates it Buy with a $317 target, about 46% above $217.16. Analyst consensus on KLA is a Buy per Benzinga Analyst Ratings. The most recent targets run from a trimmed $240 at UBS to a $325 Street-high at Cantor Fitzgerald. UBS issued the latest call, cutting to $240, still about 11% above the price. Date Firm Price Target Action Rating Jul 20, 2026 UBS $255 → $240 Maintains Neutral Jul 10, 2026 Stifel $191 → $270 Maintains Buy Jul 06, 2026 Morgan Stanley $190 → $274 Maintains Overweight Jun 29, 2026 Cantor Fitzgerald $250 → $325 Maintains Overweight _Source: Benzinga Analyst Ratings_ The three stocks fell because the market decided the AI capital-spending wave was cooling. Bank of America’s case is that it is doing the opposite. _Photo: Shutterstock_ ### Related Stocks - [KLAC.US](https://longbridge.com/en/quote/KLAC.US.md) - [LRCX.US](https://longbridge.com/en/quote/LRCX.US.md) - [AMAT.US](https://longbridge.com/en/quote/AMAT.US.md) - [LRCU.US](https://longbridge.com/en/quote/LRCU.US.md) - [AMA.US](https://longbridge.com/en/quote/AMA.US.md) - [SMH.US](https://longbridge.com/en/quote/SMH.US.md) - [SOXX.US](https://longbridge.com/en/quote/SOXX.US.md) - [SOXL.US](https://longbridge.com/en/quote/SOXL.US.md) - [SOXQ.US](https://longbridge.com/en/quote/SOXQ.US.md) - [XSD.US](https://longbridge.com/en/quote/XSD.US.md) - [PSI.US](https://longbridge.com/en/quote/PSI.US.md) - [FTXL.US](https://longbridge.com/en/quote/FTXL.US.md) ## Related News & Research - [Arete Wealth Advisors LLC Has $2.81 Million Stock Position in Lam Research Corporation $LRCX](https://longbridge.com/en/news/294574535.md) - [Lam Research (NASDAQ:LRCX) Releases Earnings Results, Beats Expectations By $0.13 EPS](https://longbridge.com/en/news/294256400.md) - [Applied Materials, Lam Research, ASM International see price target boosts at HSBC](https://longbridge.com/en/news/293939663.md) - [Lam Research Q4 revenue rises 15%, slightly beats estimates](https://longbridge.com/en/news/294253945.md) - [LRCX: Record revenue and margin growth driven by AI demand, with strong outlook for next quarter](https://longbridge.com/en/news/294254072.md)