Citi analysts initiated coverage on Veeco Instruments (NASDAQ:VECO) with a Buy rating and a price target of $35.00. As a result, shares rose more than 2% intra-day today.

The analysts expect Veeco's semiconductor equipment business, which makes up approximately 65% of its sales, to outperform the wafer fab equipment (WFE) market by about 300 basis points in 2024. This is driven by growth in the laser anneal total addressable market (TAM), new design wins in memory, and increased sales in advanced packaging.

The analysts believe that Veeco's position in critical laser anneal steps at major logic manufacturers and its potential in the memory market support this outlook.