Agentic AI Boom Lifts Semiconductor Equipment and Storage Demand

Agentic AI continuously performs multistep reasoning, rapidly expanding the KV cache used to hold a model’s intermediate state. With HBM and DRAM supplies constrained and costs elevated, data is shifting to higher-capacity, lower-cost NAND. Citi said this is broadening AI investment beyond computing chips into storage and wafer-fabrication equipment, making Applied Materials, Lam Research and KLA major beneficiaries.

On June 17, 2026, Citi analyst Atif Malik reiterated Buy ratings on all three companies. He raised his price target for Applied Materials to $710 from $550, Lam Research to $450 from $315 and KLA to $290 from $206.40. Citi’s bull-case estimates put wafer-fab equipment spending at $145 billion in 2026, $200 billion in 2027 and $250 billion in 2028.