Hardware & Networking: C2Q26 Preview: Fundamentals Progress Even as Valuations Retreat; Favor Optical, EMS & Hardware; Place GLW on -VE Catalyst Watch

研报英文原文证据摘录

Hardware & Networking: C2Q26 Preview: Fundamentals Progress Even as Valuations Retreat; Favor Optical, EMS & Hardware; Place GLW on -VE Catalyst Watch

J P M O R G A N North America Equity Research

16 July 2026

Hardware & Networking

C2Q26 Preview: Fundamentals Progress Even as

Valuations Retreat; Favor Optical, EMS & Hardware;

Place GLW on -VE Catalyst Watch

Heading into C2Q26 earnings season, valuation once again stands out as the largest IT Hardware/ Telecom & Networking

incremental change across our Hardware & Networking coverage relative to the Equipment

prior quarter; though, this time the shift has largely been to the downside, unlike Joseph Cardoso AC

in previous quarters. Importantly, this valuation pullback contrasts with the (1-212) 622-9036

fundamentals we have observed, which have progressed more steadily and joseph.cardoso@jpmchase.com

linearly, with AI infrastructure remaining the primary growth driver, though Manmohanpreet Singh AC

increasingly appearing to be accompanied by burgeoning demand for traditional (1-212) 622-4527

infrastructure as well. manmohanpreet.singh@jpmchase.com

Marc Vitenzon

As illustrated in Figure 1, the most pronounced divergence between where (1-212) 622-3342

marc.vitenzon@jpmchase.com

valuations have trended and the potential for earnings upside, in our view, has

Akanksh Chauhanbeen across the following sub-sectors: Optical, where demand continues to

(1-212) 622-0045

outpace supply and upcoming high-margin opportunities are poised to begin akanksh.chauhan@jpmorgan.com

ramping in 2H26; EMS, where overall demand from cloud customers continues to J.P. Morgan Securities LLC

face upside pressure and where new programs are likewise poised to ramp in 2H26;

and Hardware (particularly compute-related), where strong demand for AI