Artificial intelligence (AI) infrastructure buildout is gaining momentum. Bank of America sees the U.S. semiconductor industry expanding at an 18% CAGR through 2030, a notable jump from its prior 14% call as AI infrastructure spending accelerates.

As cited in a Yahoo Finance article, BofA expects the sector's total market opportunity to hit $3.2 trillion by decade's end, with memory chips and data center components driving much of the surge. It believes the industry could double its current $1.7 trillion market size in just four years, a stark contrast to the five decades it took to first cross $1 trillion.

Within chip equipment, BofA is especially bullish on wafer fab equipment (WFE)— the front-end machinery used to actually process silicon wafers. The bank raised its 2026 WFE spending forecast to $156 billion and expects $210 billion in 2027, fueled largely by surging DRAM demand to keep pace with the AI data center boom.

Against this backdrop, here are three WFE names—Applied Materials, Inc. (AMAT Quick QuoteAMAT - Free Report) , Lam Research Corporation (LRCX Quick QuoteLRCX - Free Report) and KLA Corporation (KLAC Quick QuoteKLAC - Free Report) that look well-positioned to ride the wave. All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Applied Materials

The company is well positioned to benefit from the AI-driven semiconductor spending cycle. AI infrastructure is pushing investment toward leading-edge logic, DRAM and advanced packaging, areas that management expects to account for most WFE growth in 2026 and 2027. This is already showing up in results, with Semiconductor Systems revenues rising 27% year over year in the third quarter of fiscal 2026 to $7.04 billion, with the next-quarter guidance calling for a steeper 62% jump to around $7.9 billion.

Applied Materials is also benefiting from rising process complexity. As chipmakers adopt GAA, advanced FinFET and more sophisticated memory architectures, demand is increasing for Applied Materials’ deposition, etch and treatment tools. DRAM revenues hit a record in the last reported quarter, while advanced packaging revenues are now expected to grow more than 70% in 2026, supported by HBM and 3D chiplet adoption.

Importantly, growth is translating into better profitability. Gross margins have expanded for 13 consecutive quarters, helped by value-based pricing and cost improvements.

With customers providing longer-term capacity forecasts and the company expanding manufacturing capacity, demand visibility is improving. Strong cash generation and a solid balance sheet further support shareholder returns. Overall, AMAT has multiple avenues to participate in the AI semiconductor buildout.

The Zacks Consensus Estimate for AMAT’s fiscal 2026 and 2027 EPS implies a year-over-year uptick of 36% and 43%, respectively.

Lam Research

Lam Research is positioned to benefit from the next leg of semiconductor spending, with memory and AI infrastructure at the center of the opportunity. Management has raised its calendar year 2026 WFE outlook to the low-$150 billion range, while stronger growth is expected in 2027. NAND is a key driver, as customers upgrade to higher-layer devices, creating more opportunities for Lam’s etch and deposition tools.

AI is also expanding demand for HBM and advanced packaging. Lam expects packaging revenues to grow more than 70% in calendar year 2026, supported by its expertise in TSV etch, electroplating and panel-level packaging. At the same time, technology shifts such as gate-all-around, advanced DRAM and smaller process nodes are increasing etch and deposition intensity, helping expand Lam’s served market.

Its Customer Support business adds another recurring growth driver, benefiting from high fab utilization and equipment upgrades. Strong execution is also visible in expanding margins, with management targeting further improvement over the next few years.Management expects gross margin at the mid-50% level and operating margin at the mid-40% level over the next several years.

With a large installed base, growing technology exposure, solid liquidity and continued cash returns, Lam Research has a strong foundation for sustained growth.

The Zacks Consensus Estimate for LRCX’s fiscal 2027 and 2028 EPS implies a year-over-year uptick of 61% and 22%, respectively.

KLA Corp.

KLA is benefiting from a semiconductor industry where manufacturing complexity is increasing, making process control more important. As chipmakers move toward smaller nodes, wider use of EUV, larger dies and advanced HBM, inspection and metrology requirements are rising. This is expanding the opportunity for KLA’s higher-end process control tools, while advanced packaging and hybrid bonding are creating additional demand.

The company also has a strong recurring revenue base. Services grew at a healthy pace in fiscal 2026, with around 80% of service revenues tied to contracts.

Meanwhile, AI-related investment is supporting leading-edge logic and memory spending. KLA’s backlog above $12 billion provides visibility into future shipments, while the company continues to gain share in process control and advanced packaging. Its advanced packaging business is expected to grow sharply as chip architectures become more complex.

Strong cash generation adds another layer to the story, allowing KLA to return most of its free cash flow through buybacks and dividends. Taken together, rising process-control intensity, recurring services and share gains give KLA several ways to grow as semiconductor manufacturing becomes increasingly difficult to control and optimize.

The Zacks Consensus Estimate for KLAC’s fiscal 2027 and 2028 EPS implies a year-over-year uptick of 44% and 21%, respectively.