Technology

Top Analyst Has 4 Red-Hot Semiconductor Capital Equipment Stocks to Buy Now for 2021

The Display and Adjacent Markets segment offers products for manufacturing liquid crystal displays, organic light-emitting diodes and other display technologies for TVs, monitors, laptops, personal computers, electronic tablets, smartphones and other consumer-oriented devices, as well as equipment for processing flexible substrates.

Applied Materials stock investors receive just a 0.81% dividend. The BofA Securities price target for the shares is $115, while the Wall Street consensus target is down at $98.84. The stock closed trading on Tuesday at $109.22 a share, after a gain of almost 6% for the day.

KLA

This is another strong large-cap play for investors looking for exposure to capital equipment. KLA Corp. (NASDAQ: KLAC) designs, manufactures and markets process control and yield management solutions worldwide.

It offers chip manufacturing products, such as front-end defect inspection tools, defect review systems, advanced packaging process control systems, metrology solutions, in-situ process monitoring products and lithography software; wafer manufacturing products comprising surface and defect inspection, wafer geometry and nanotopography metrology and data management; and reticle manufacturing products, such as defect inspection and pattern placement metrology products.

The company also provides light emitting diode (LED), power device and compound semiconductor manufacturing products consisting of patterned wafer inspection, defect inspection, surface metrology and data management products; thin-film head metrology and inspection, virtual lithography, in-situ process monitoring, transparent and metal substrate inspection and data management products for data storage media/head manufacturing; and stylus and optical profiling and optical inspection products for microelectromechanical systems manufacturing, as well as products for general purpose/lab applications.

Many analysts feel that KLA is less cyclical than peers with best-in-class returns. The company’s purchase Orbotech two years ago added growth and diversity and sales and earnings per share accretion. Risks for the shares include industry cyclicality, relatively muted growth and limited operating leverage.

Shareholders receive a 1.24% dividend. The BofA Securities has a $315 price target, and the consensus target is much lower $272.60. The last trade on Tuesday came in at $314.08.

Lam Research

This remains one of the top chip equipment picks across Wall Street and the stock was up big on recent bullish reports. Lam Research Corp. (NASDAQ: LRCX) designs, manufactures, markets, refurbishes and services semiconductor processing equipment used in the fabrication of integrated circuits worldwide.

The company offers ALTUS systems to deposit conformal films for tungsten metallization applications, SABRE electrochemical deposition products for copper damascene manufacturing, SOLA ultraviolet thermal processing products for film treatments and VECTOR plasma-enhanced chemical vapor deposition atomic layer deposition products.