Micron surge is bullish for these other stocks, says Bank of America
View original at finance.yahoo.comMicron surge is bullish for these other stocks, says Bank of America I started investing in the 1990s and joined Wall Street on the sell side in 1997…
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This WFE upcycle is more powerful and durable than previous ones, suggesting continued semicap outperformance in CY26
80% confidenceProcess control will gain 100 bps of share to 13% of WFE in 2026
80% confidenceFCF margins at AMAT, LRCX, and KLAC could reach 20% to 30% through 2028
80% confidenceTraining is significantly and increasingly compute-intensive, and compute needs are accelerating rapidly, particularly as more models move into production
80% confidenceAn evolving supercycle could be a strong tailwind for semiconductor equipment and manufacturing stocks, including those tied to memory capital expenditures
80% confidenceTo address tight supply-demand conditions extending beyond 2026, capital spending in fiscal 2026 will be approximately $20 billion weighted to the second half of the fiscal year
80% confidenceSemicap equipment will see 10%/14% YoY growth in CY26/27E towards $131bn/$150bn driven by fab upgrades to support high-bandwidth memory, higher layer count NAND, leading-edge logic and advanced packaging
80% confidenceKLA is a best-in-breed stock and is the one stock in his coverage that he has never downgraded from a 'buy' rating
80% confidenceMicron's sales and profit will jump to $18.7 billion and $8.42 per share in the upcoming quarter
80% confidenceEtch/dep (AMAT/LRCX) could expand to 42% of share, up 3% since 2023, with NAND and HBM contributing to gains for all three companies
80% confidenceSemicaps will outperform in CY26 as upstream beneficiaries of capacity expansions and tech upgrades to support multi-year AI infra demand, with upside in C2H'26 and CY27 as visibility into capex plans and fab ramp timelines improves
80% confidenceSemicap trading at a premium to historical multiples, but there is potential for continued EPS upgrades given consensus models' bottom-up sales growth (6-8% annual) below our top-down WFE (10%+) forecast
80% confidenceReasoning models answering challenging queries could require over 100 times more compute compared to single-shot inference
80% confidence2026 will feature another ~30% growth towards the first $1tn for semiconductor sales, supported by nearly double-digit YoY wafer fab equipment (WFE) sales growth
80% confidence