Wolfspeed named catalyst stock at Citi

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Wolfspeed named catalyst stock at Citi
Credit: © Reuters.

By Investing.com Staff

Shares of Wolfspeed Inc (NYSE: WOLF ) fell 2.5% Friday despite being highlighted as a positive catalyst stock to watch at Citi.

Citi's U.S. semiconductor analysts opened a positive catalyst watch on WOLF after the company's expansion of an existing multi-year long-term SiC wafer supply agreement worth $255 milion with a leading power device company for 150mm wafers yesterday.

While WOLF didn't name the customer and Citi analysts didn't speculate, an analyst at Craig-Hallum earlier speculated the WOLF client in question was Infineon (OTC: IFNNY ) after ruling out ON Semiconductor Corporation (NASDAQ: ON ) or STMicroelectronics NV (NYSE: STM ).

"We believe the agreement shows the tight supply & strong demand for SiC devices," Citi analysts commented. "Moreover, we attended the SEMI hosted SiC webinar recently and walked away with the impression that wafer substrates remain the most difficult part of EV power devices as wafer manufacturing requires good seed layer, smaller boule length, and defect prone slicing/polishing process steps."

The firm reiterated a Buy rating and $100 price target on WOLF.

Meanwhile, the analysts removed KLA Corporation (NASDAQ: KLAC ) from Citi's Focus List, with the stock up 25% since 9/27. KLAC remains the firm's #1 Buy-rated equipment pick on favorable WFE spending mix next year and further multiple expansion on auto/SiC products growth. The firm reiterated a Buy rating and $400 price target on KLAC.

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