Core Viewpoint - Wells Fargo anticipates a new phase in the semiconductor rally, expecting significant gains ahead, and has upgraded KLA Corp and Lam Research while maintaining a top pick on Applied Materials [1][2]. Semiconductor Industry Outlook - Wells Fargo recognizes that semiconductor capital equipment stocks have become a "consensus long" and have outperformed year-to-date, yet still expects demand indicators to show tighter supply/demand dynamics for logic and memory, supporting further wafer fab equipment (WFE) growth into 2027 [2]. Company-Specific Insights - KLA Corp specializes in semiconductors and electronics, producing integrated circuits, wafers, and printed circuit boards, all of which are in high demand due to the AI boom. The upgrade reflects expectations of rising process complexity, particularly with the upcoming mass production of 2nm transistors [5]. - Wells Fargo has raised KLA's price target significantly from $1,250 to $1,600, while also increasing its WFE estimate by an average of 10% and lifting its 2026 and 2027 forecasts above market expectations [6].