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Applied Materials, Lam, Nvidia, Marvell Top Chip Stocks at Citi

'Design complexity and the migration to 3D structures [and] innovations in semiconductor materials' will help chip stocks, Citi says.
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Citigroup analysts named Applied Materials  (AMAT) - Get Applied Materials, Inc. Report, Lam Research  (LRCX) - Get Lam Research Corporation Report, Nvidia  (NVDA) - Get NVIDIA Corporation Report and Marvell Technology  (MRVL) - Get Marvell Technology, Inc. Report as their top four semiconductor-stock picks for 2022, in that order.

They rate Applied Materials a buy and have a price target of $175. It recently traded at $147.93, up 1%.

The company will benefit from its 3-D device business, systems with multiple processors and massive government spending on the chip industry, the analysts said, according to Barron’s.

“Design complexity and the migration to 3-D structures along with innovations in semiconductor materials will likely generate significant changes and opportunities for material and equipment suppliers,” they said.

“Sustained government backed spending could help to keep semiconductor equipment spend at elevated levels in the next two-three years and perhaps limit a broader market cyclical pullback.”

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The analysts rated Lam Research buy with a price target of $750. It recently traded at $665.29, up 0.6%. Lam enjoys dominance in flash memory, which will grow along with cloud usage, they said.

They rate Nvidia buy with a price target of $350. It recently traded at $300.20, down 2%.

The company counts as a “secular winner” when it comes to the metaverse, the analysts said.

The analysts actually pushed Marvell to down to fourth place from third because the stock had risen so much. Marvell has climbed 75% in the past six months, 38% in the past three months and 18% in the past month.

KLA  (KLAC) - Get KLA Corporation Report, previously the analysts’ No. 2 selection, was moved down to fifth in the list, due to valuation. The stock recently was trading little changed at $4