Semiconductor/Semi Cap 2Q Earnings Preview: Plenty of Juice Left to Squeeze

Research evidence excerpt

Semiconductor/Semi Cap 2Q Earnings Preview: Plenty of Juice Left to Squeeze

June 29, 2026

Semiconductor/Semi Equipment 2Q26 Earnings Preview: There is Still Plenty

of Juice Left to Squeeze

Following a return to "risk on" for Semiconductor stocks in early-April, the SOX is now +92% YTD — begging the

question of whether there is still more juice to squeeze. The short answer is an unequivocal YES. The current AI

Infrastructure build-out is the product cycle of our lifetime, and with meaningful constraints across the

Semiconductor supply chain, we view this cycle as both durable and elongated. Hyperscaler capex is on track to

surpass $1 Trillion in 2026, with 75% directed to AI infrastructure, propelling global Semiconductor revenues toward

$1.6T. We are currently token-maxing notwithstanding a ~90% decline in cost per token per year – Hello Jevon’s

Paradox! Agentic AI is just getting started, where Enterprise AI is broadly adopted but barely deployed at scale —

with fewer than 1 in 8 companies running agents in production. Thus, the largest deployment backlog in enterprise

technology history is about to hit the Semiconductor supply chain – likely sustaining excellent top-line growth

through CY30 at a minimum. We had been discussing a path to $3T in Semi revs into CY30, but we now see that as

achievable in CY29, with $3.5B+ likely by CY30.

Semiconductor stocks are obviously meaningfully more expensive vs. 3 months ago. That said, when reflecting on

our CY28 stretch EPS estimates, we would easily make the argument that as long as this cycle is durable (i.e., 2028 is

not peak), that valuations for many names continue to screen inexpensive and well-below the S&P 500. Moreover,