B. Riley Names Cohu, Camtek Top Semiconductor Equipment Picks on AI Demand

Analyst firm B. Riley has identified key investment opportunities in the semiconductor capital equipment sector, highlighting companies positioned to capitalize on surging demand for artificial intelligence. The firm views a recent pullback in the sector as an attractive entry point for select stocks, particularly in the back-end and outsourced semiconductor assembly and test (OSAT) sub-sectors.

AI-Driven Demand Creates Tailwinds

According to B. Riley, several fundamental trends are supporting growth, led by the increasing need for AI-related infrastructure. The firm's analysis points to rising capital expenditures at major foundries and memory manufacturers, which are boosting demand for 2.5D packaging and high-bandwidth memory (HBM).

This investment cycle creates specific tailwinds for companies providing inspection, handler, and ball bonder equipment, the analysts said. The positive outlook follows a period of volatility; after the sector's gains in the first half of 2026 averaged roughly double the SOX index’s 108% increase, it has since experienced a 23% pullback in the third quarter to date. B. Riley suggests this decline enhances the investment case, while acknowledging risks from a potentially moderating outlook for PCs and smartphones.

B. Riley's Top Picks

B. Riley designated two companies as its top opportunities, issuing 'Buy' ratings for both:

Ad

• Cohu, Inc. (COHU): The firm raised its price target on Cohu to $65 from $60, projecting above-consensus results driven by its AI-related inspection and handler systems. The stock trades at 38x forward two-year earnings, according to the note.
• Camtek Ltd. (CAMT): B. Riley assigned a $220 price target, citing a recent $105 million contract win from an OSAT provider and an HBM manufacturer as a key indicator of strong demand. The stock is valued at approximately 35x forward two-year earnings.

Neutral Stance on Other Peers

The firm maintained a 'Neutral' rating on two other industry players, Amkor Technology and Kulicke and Soffa Industries.

B. Riley lowered its price target on Amkor Technology, Inc. (AMKR) to $75 from $90, though it expects results to be slightly above consensus. For Kulicke and Soffa Industries, Inc. (KLIC), the firm holds a $100 price target, noting that the stock's 193% surge in the first half of the year has left it trading near the target price despite a recent pullback.