Rolling over PTs to 2028

Research evidence excerpt

Rolling over PTs to 2028

Idea

July 6, 2026 04:13 AM GMT

Morgan Stanley & Co. LLCMSemiconductor Capital Equipment | North America Shane Brett

Equity Analyst

Rolling over PTs to 2028 Shane.Brett@morganstanley.comJoseph Moore +1 212 761-1022

Joseph.Moore@morganstanley.com +1 212 761-7516

$200bn of WFE in 2027 is well understood, and $250bn in Mason Wayne

2028 is starting to be priced in. We see opportunity in MKS and ResearchMason.Wayne@morganstanley.comAssociate +1 212 761-6012

ONTO, where 2027 earnings power remains underappreciated. Ella Tulchinsky

Research Associate

We are slightly less enthusiastic on the large caps. Ella.Tulchinsky@morganstanley.com +1 212 761-2222

Nicole Kozhukhov

What’s Changed? We revise up our 2026 forecast from $149bn (+27% y/y) to Research Associate

$155bn (+32%), our 2027 forecast comes up from $191bn (+28%) to $202bn (+31%) Nicole.Kozhukhov@morganstanley.com +1 212 761-1636

and our 2028 forecast comes up from $215bn (+13%) to $227bn (+13%). The Semiconductor Capital Equipment

majority of our 2026-27 revisions are from our intra-quarter memory WFE revisions, North America

Industry View In-Line

and our 2028 revisions are driven by foundry logic.

What’s Changed

$200bn in 2027 is priced in. Our large-cap US SPE coverage now trades at 37x our Camtek (CAMT.O) From To

CY27 forecasts, which have been adjusted to reflect our updated WFE outlook. That Price Target $163.00 $167.00

37x multiple represents a 75% premium to the 21x through-cycle average at which KLA Corp (KLAC.O) From To

these stocks have traded since 2020, and a 20%+ premium to the most recent peak Price Target $190.00 $274.00

of 30x in July 2024. We think $200bn of WFE in 2027 is well understood by the Lam Research Corp (LRCX.O) From To

Price Target $331.00 $404.00