Gartner projects spending on data center systems could rise 55% in 2027 to nearly $1.4 trillion, driven by hyperscalers and AI companies building out AI infrastructure. The article argues this benefits chipmakers, noting chips make up 95% of an AI data center server rack's value, which should lift demand for chipmaking equipment. Applied Materials reported fiscal 2026 third-quarter revenue up 25% year over year to a record $9.12 billion and non-GAAP EPS up 41% to a record $3.50, and guided fiscal fourth-quarter revenue to $10.25 billion (up 51%) with EPS of $4.02 (up 85%). The company expects annual semiconductor revenue to reach $1.7 trillion to $3.2 trillion by 2030, targets services revenue above $12 billion, and aims for a 40% non-GAAP operating margin by then. The stock has fallen 35% since early July to around $400 and trades at 23 times forward earnings; the author estimates that if EPS reaches $23.69 in fiscal 2029 and the stock trades at 30 times earnings, it could reach $710, a 77% gain over two years.
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data centerssemiconductorsartificial intelligenceNVDAearnings
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Related tickers and likely impact
NVDA
▲ Likely positiveNvidia
Relevance: medium
| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Semiconductors |
| Market cap | $5.1T |
| Close on 10/30/2026 | 204.81 |
| Change that session | -4.14% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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