Putting the ‘air‘ in Ai

Research evidence excerpt

Putting the ‘air‘ in Ai

A FAB set of wins. Double upgrade to Buy.

We double upgrade Air Liquide to Buy. The energy-transition slowdown that underpinned

our prior cautious stance has been validated by project delays, but in fairness the group

has navigated well in winning Electronics projects to secure a record backlog. Our near-

term group estimates are broadly in line with consensus, but we think this misses a

more important change; namely the mix and duration of Air Liquide’s growth look set to

improve. Electronics is only c10% of current sales, but AI-led semiconductor capex

comprises c40% of the investment backlog; supported by the recent DIG acquisition. In

our view, improved multi-year visibility on growth justifies a P/E and relative premium to

the market towards the upper end of its historic range.

Electronics to grow at double what consensus expects

Air Liquide is the number one supplier of gases used in the semiconductor

manufacturing process such as high purity nitrogen and noble gases. Our analysis

concludes that the Electronics franchise is set to organically grow at c14% through

2026-30E, effectively double the rate in consensus. We therefore see Electronics

becoming an increasingly important contributor, driving c40% of our estimated 4.5%

group organic growth in FY’27E and expect it also to be margin accretive. In their

Semiconductor Capital Equipment (23 Jun’26) report, our BofA Semis team forecasts

semiconductor capex to rise, from c$190bn in 2025 to c$370bn in 2030, implying c15%

average growth. Nearer-term, Micron’s second Idaho fab also provides potential

opportunity, where we see Air Liquide well positioned.

Better growth, better visibility, better margin mix

Given the multi-year nature of fab construction, the benefit from Electronics backlog will