Bernstein raises WFE growth estimates, boosts price targets

Investing.com -- In a note on Tuesday, Bernstein lifted its forecasts for wafer fabrication equipment (WFE) spending, raising price targets across its semiconductor equipment coverage on growing conviction that the current upcycle "has legs."

Analyst David Dai lifted the firm's 2026 WFE estimate to $148 billion, up 26.3% year over year, its 2027 figure to $204 billion, up 32.6%, and its 2028 estimate to $259 billion, up 27%.

The two-year growth of 75%, Dai said, "strengthens our WFE upcycle call," with the uplift spread across all applications but skewed slightly more toward non-China memory and China foundry and logic.

Bernstein now forecasts global ex-China WFE to grow 36% in 2026 and 37% in 2027, driven largely by DRAM and foundry revisions. It sees China WFE demand reaching $57 billion, $73 billion and $101 billion across 2026 to 2028, with memory leading the surge.

The firm raised targets on the three U.S. names, all rated Outperform, taking Lam Research to $385 from $365, KLA to $250 from $225, and Applied Materials to $675 from $525. Bernstein prefers AMAT first, given "most exposure to leading edge logic, DRAM, and packaging," followed by Lam and then KLA.

In Japan, Bernstein continues to prefer Kokusai and Tokyo Electron to benefit from stronger memory capex, while ASML "stands out as our top pick" in Europe, with dollar revenue seen growing at a 34% compound annual rate through 2028. The firm maintained Outperform ratings on Chinese names AMEC, NAURA and Piotech.

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