News about semiconductors

Nasdaq futures rose 1.1% before Monday's open, Dow futures gained 0.1%, and S&P 500 and Russell 2000 futures rose 0.5%, rebounding from the worst week for the Nasdaq and S&P 500 since early June amid concerns over AI spending and valuations. On Stocktwits, retail sentiment on SPY turned 'bearish' and QQQ moderated to 'neutral'. Nvidia is reportedly asking Samsung, SK Hynix and Micron to use TSMC's 3-nanometer process for the base die of its next-generation HBM chips. Tesla (TSLA) won a procedural ruling in a false-advertising lawsuit, while investor Gary Black sees SpaceX buying Tesla at $420/share. AST SpaceMobile (ASTS) drew interest after falling to $40, when Boost Mobile founder Peter Adderton said he was willing to buy the stock.

The report values 3D integrated circuits at $16.8bn in 2024, with the memory segment projected to reach $22.2bn by 2030 as data centres need denser, more energy-efficient chips. Growth is driven by cloud computing, data centres, AI and machine learning, along with demand for miniaturised consumer devices and heterogeneous integration. The memory segment is forecast to grow at a CAGR of 19.2% and LEDs at 18.2%. The US market was about $4.6bn in 2024, while China is forecast to grow at a CAGR of 16.6% to roughly $6.7bn by 2030. The analysis also covers tariff risks, supply chain shifts and 26 companies, and names TSMC, NVIDIA, Micron and Amkor among those in the competitive race.

Members of Micron's Taoyuan union in Taiwan voted 99% in favour of authorising a strike over how the company splits profits, though no date has been set. The union wants 15% of operating profit paid to workers through a permanent system, and mediation failed in September, prompting Taiwan's labour ministry and President Lai Ching-te to urge both sides to negotiate. Taiwan is arguably Micron's most important country, with most of its fiscal 2026 DRAM output made there, but the vote so far covers only the smaller Taoyuan site, while the Taichung union, representing around 10,000 workers in Taichung and Tainan, holds a second mediation session on Oct. 22. Micron says it has already sold out all the 2027 capacity of the Taichung factory, so a long strike could leave it short on contractual deliveries. The shares trade near $879, about 28% below their late-June record close of $1,213.56, and the author still expects a deal and does not see the vote as a reason to sell.

SK hynix has launched a 2 trillion won ($1.5 billion) financing program with major commercial banks and a state-run trade insurer to help domestic chip suppliers secure cheaper funding. Under the deal, SK hynix and the participating banks will contribute 100 billion won, while the Korea Trade Insurance Corporation will provide guarantees worth up to 20 times that amount, supporting as much as 2 trillion won in financing. The initiative targets small and midsized suppliers of semiconductor materials, parts and equipment, who face high borrowing costs. The company is also building the Trinity Fab, an 870 billion won testing facility at the Yongin cluster where suppliers can validate products under real manufacturing conditions.

Asian shares fell Monday as worries about AI's enormous funding needs weighed ahead of a busy earnings week, while the euro eased amid political unrest in France. Oil dropped after President Trump's decision to waive some Russia sanctions, though a final decision has not been made, which helped bonds and US stock futures; Brent fell 1.6% to $108.06 a barrel and US crude 0.7% to $100.70. The 10-year Treasury yield fell 3 basis points to 5.0645% after its largest weekly drop in over eight months. Japan's Nikkei dropped 2.0% and South Korea 1.6%, after heavy losses last week, while the PHLX Semiconductor Index shed 11.4%, its longest losing streak since 2008. Major earnings from Meta, Tesla, Lam Research and others are due this week, and five AI hyperscalers are expected to lift capital spending to about $1.2 trillion next year, according to Goldman Sachs; gold rose 0.4% to $4,181 an ounce.

U.S. chip stocks rebounded over the weekend after their worst week since March, as investors repositioned ahead of third-quarter earnings from Tesla, Netflix and Meta. Intel and AMD each rose about 2.6% in overnight trading, while Micron and SanDisk gained 1.8% and 2.6%, and the iShares Semiconductor ETF (SOXX) rose 2.4% after an 11.8% drop the previous week. In a Nikkei interview, Intel CEO Lip-Bu Tan said the company was “80% done” with its restructuring and pointed to AI chip packaging and ASICs as growth areas. Intel also unveiled its GPU D-series with up to 480GB of memory, which according to TechRadar surpasses the 288GB of Nvidia's Blackwell Ultra B300 for data center GPU memory capacity. Stocktwits sentiment was bullish on SOXX, bearish on INTC, neutral on AMD and bullish on MU and SNDK, while one trader warned of possible further downside before a bounce and advised caution with long positions until last week's high is broken.

The 5th GMIF Innovation Summit (GMIF2026) concluded in Shenzhen, co-hosted by the Shenzhen Memory Industry Association (SMIA) and the School of Integrated Circuits at Peking University, under the theme 'The Future Built on AI Memory and Storage.' As AI shifts from training to large-scale inference, tokens are becoming a unit of value, making memory and storage bandwidth, capacity and energy efficiency key to system performance and cost. Morgan Stanley's Daniel Yen projected that more than half of cloud data center capex will go to memory and storage (excluding HBM) by 2027, and identified six paths to overcome the 'memory wall.' Speakers from Peking University, Samsung, Sandisk, Solidigm, Arm and Silicon Motion said HBM remains central to high-end AI but is constrained by yield, cost and thermal limits, pointing to NAND-based high-bandwidth options, tiered storage and liquid cooling. The summit also highlighted that value-chain collaboration is becoming a deeper partnership built around workload requirements and joint scenario validation.

The 5th GMIF Innovation Summit (GMIF2026) was held in Shenzhen under the theme 'The Future Built on AI Memory and Storage', co-hosted by the Shenzhen Memory Industry Association and the School of Integrated Circuits at Peking University. Daniel Yen of Morgan Stanley projected that more than half of cloud data center capex will go to memory and storage (excluding HBM) by 2027, and outlined six innovation paths to overcome the 'memory wall'. Prof. Yimao Cai said HBM remains central to high-end AI compute but is limited by yield, cost and thermal constraints, pointing to NAND-based high-bandwidth technologies such as HBF as a major research focus. Samsung's Kevin Yoon said AI agents are generating massive KV cache demand, while Sandisk's Maya Zhang called this the first year of the 'inference boom', in which SSDs act as a 'token battery'.

Starboard Value sees significant upside in Skyworks Solutions (SWKS) if the company delivers on the cost savings and margin targets from its merger with Qorvo, according to Bloomberg, citing people familiar with the matter. The activist investor considers Skyworks undervalued after completing the Qorvo acquisition earlier this month, and sees growth from the companies' complementary product portfolios. The merger targets at least $500 million in annual cost savings within three years, while management forecasts operating margins of 30% to 35% within two to three years. The combined company is valued at about $22 billion, as both firms face slowing growth after Apple shifted toward in-house chips.

The won strengthened against the US dollar as export-driven supply of dollars grew, with exporters selling USD, supported by a semiconductor boom. The BoK's average won/USD rate for the first 12 trading days of October 2026 was 1,342.6, the lowest since September 2024, compared with 1,528 in June 2026. Average daily trade surplus in September 2026 was nearly $2.5 billion, far exceeding net foreign stock selling. The BoK raised its base rate to 3% in July and August 2026, and the IMF lifted its 2026 growth forecast for South Korea to 3.3%. Analysts expect the won to trade around 1,300 per dollar by year-end, but warn volatility may persist due to Middle East risks, oil prices and foreign capital outflows from the stock market.

Shares of ChangXin Memory Technologies (CXMT) fell 6.5% on Monday, even after the company forecast a sharp swing to profitability for January–September 2026. It expects net profit attributable to shareholders of 131 billion to 132.5 billion yuan ($19.58 billion), versus a net loss of 5.28 billion yuan a year earlier, on revenue of 265 billion to 270 billion yuan. The company attributed the improvement to surging AI computing demand that has boosted the global DRAM market, causing supply shortages and sharp price increases. CXMT now accounts for 10% of global DRAM revenue in Q3 2026, up from 5% a year earlier, according to Counterpoint Research.

AMD shares have sold off recently, even though the company has benefited from an AI chip shortage because Nvidia cannot meet all demand. The article argues that valuation is a bigger risk than the AI business, with AMD's P/E at 139 and forward P/E at 72, several times higher than Nvidia, Broadcom and Taiwan Semiconductor. If AMD's P/E fell to Nvidia's current level, the stock could lose close to 80% of its value. Still, the valuation is seen as more of a threat to the stock than to the company, since data center AI chips made up 58% of AMD's latest-quarter revenue versus almost 93% for Nvidia. The author reduced AMD holdings for diversification but kept a substantial long-term position.

The article estimates what a $10,000 investment in Nvidia, now worth nearly $179,000 after four years of AI-driven gains, could be worth by 2030. Nvidia's revenue in the first six months of fiscal 2027 rose 96% to $177.8 billion, and analysts expect fiscal 2027 revenue of $411.6 billion, with EPS nearly doubling to $9.31. The author cites Jensen Huang's view that chip sales will double in 2027 and a $3 trillion to $4 trillion AI infrastructure opportunity by 2030. Assuming revenue reaches $1.09 trillion in 2030 and the stock trades at half its current 18 times sales, the market cap could reach $9.8 trillion, implying 88% upside and a $10,000 stake worth more than $18,800. The article calls this a conservative estimate.

The author says that if he could own only one AI memory stock for the next five years, he would choose SK Hynix (SKHY) over Micron (MU). According to Counterpoint Research, SK Hynix accounted for 50% of global HBM revenue in the second quarter, nearly as much as Samsung and Micron combined, thanks to early investment in advanced memory packaging and manufacturing. The company began mass shipments of HBM4 in the second quarter and is developing HBM4E. Demand comes not only from Nvidia but also from AI hyperscalers such as Alphabet, Amazon, Microsoft, Meta, OpenAI and Anthropic, which are developing custom chips. The author notes that SK Hynix's valuation remains fairly modest on a forward P/E basis relative to its earnings growth.

Micron is benefiting from a memory chip shortage driven by AI data center demand, with revenue rising nearly 380% year over year in its latest quarter. The author argues the company is reducing the cyclicality of its business through multiyear take-or-pay contracts covering about 35% of revenue through 2030, along with new production facilities expected in mid-2027 and late 2028. The stock trades at 5.3 times fiscal 2027 earnings estimates, while Wall Street projects 16% growth for 2028; the author instead assumes 30% growth and a 20 times multiple, implying a price of $4,590 versus today's $920. According to the article, the market has not yet priced these changes into the stock.

Memory chips have historically moved in boom-and-bust cycles, and Micron trades at a forward P/E of just over 5 times fiscal 2027 estimates as investors expect the current AI-driven supercycle to eventually end. Micron has signed 26 strategic customer agreements covering about 35% of its sales through 2030, while China's CXMT has lifted its DRAM share from 4% in Q2 2025 to 10% in Q2 2026 and could add new supply. KeyBanc analysts reportedly see HP and Dell extending their deals into 2031 and Alphabet talking about extensions to 2035. In the near term, KeyBanc projects DRAM prices rising 15% to 20% quarter over quarter, with NAND prices up more than 20%.

TSMC reported a strong third quarter driven by AI chip demand, with revenue up 51% in New Taiwan dollars and 41% in US dollars, and profit up 69% year over year. The stock still fell during the trading day after earnings, which the author attributes more to the broader market outlook than to the results. CEO C.C. Wei said demand is very robust with no sign of slowdown, and that the earlier guidance of a 50% CAGR for AI-related chip revenue from 2024 to 2029 may be too low. The author notes the stock trades at 18 times next year's earnings and 27 times trailing earnings; if TSMC meets 2027 expectations and the valuation holds at 27 times, that math implies a 50% rise, though the author stresses this is only arithmetic and not a certainty.

Asia's AI trade is under pressure as a selloff in US tech stocks raises worries that higher financing costs could slow the data center spending that supports regional chipmakers and suppliers. Oil's surge to US$110 a barrel has added inflation concerns, while US chip shares had their longest rout since 2008. A Goldman Sachs basket of Asian AI hardware stocks fell 11 percent last week, with Samsung Electro-Mechanics down 23 percent and Unimicron off 14 percent. CoreWeave's shares dropped 25 percent in a week as its bonds signaled distress, and Gartner warned that more than US$3.5 trillion of AI infrastructure spending could be impaired by 2030. Still, there is little sign so far that orders have weakened.

ASML reported record third-quarter 2026 revenue of 11.7 billion euros, up 56% from a year earlier, with gross margin rising to 57.5% and earnings per share up 136% to 12.95 euros, and it raised full-year guidance. CEO Christophe Fouquet said customers do not expect supply to catch up with demand until 2028, even with plans to increase supply by 30% in 2027 and 2028. For the current quarter, guidance is 14.7 billion euros in revenue, a 51% rise, with a 57% gross margin. The article says the stock trades at 29 times forward earnings versus 20 for the S&P 500, with consensus expecting 67% earnings growth in 2026 against 32% for the index. Its scenario assumes 45% annual earnings growth in 2027 and 2028 and an unchanged 29x multiple, which would imply a price of $2,827 in 2028, or 72% upside.

Wall Street's AI rally faces a test as investors await earnings from Meta, Tesla, chipmakers Lam Research and Texas Instruments, and SpaceX. Recent declines in AI, chip and hardware stocks such as Dell Technologies have raised doubts about whether the rally can continue. LSEG IBES data show S&P 500 earnings are expected to rise more than 30% in the third quarter, but investors want proof that heavy AI spending will pay off. Goldman Sachs expects five hyperscalers to lift combined capital spending to around $1.2 trillion next year. The S&P 500 posted its biggest weekly fall since June but remained only about 2% below its record high.

ASML reported record third-quarter results on October 14 and raised its full-year guidance. Revenue reached 11.7 billion euros, up 56% year over year, with gross margin rising to 57.5% and earnings per share jumping 136% to 12.95 euros. CEO Christophe Fouquet said supply is not expected to catch up with demand until at least 2028, and guidance calls for 14.7 billion euros in revenue next quarter, up 51%. The stock trades at 29 times forward earnings, a premium to the S&P 500's 20, which the author says is justified by expected growth. Assuming 45% annual earnings growth in 2027 and 2028, the author projects EPS of 97.49 USD and a stock price of 2,827 USD by 2028, implying 72% upside.

ASML reported record third-quarter results on Oct. 14, with revenue of €11.7 billion, up 56% year over year, a gross margin of 57.5%, and earnings per share up 136% to €12.95, and it raised its full-year guidance. The company expects €14.7 billion in revenue for the current quarter at the midpoint of its range. CEO Christophe Fouquet said customers don't expect supply to catch up with demand until at least 2028, while ASML aims to raise supply by 30% in both 2027 and 2028. The article argues that concerns about AI infrastructure spending may be overblown and, assuming 45% annual earnings growth, suggests the stock could rise about 72%, though it trades at 29 times forward earnings.

A heavy earnings week begins with Meta Platforms, Tesla, Netflix and Texas Instruments set to report, alongside Wednesday's crude oil inventory data. Pressure on semiconductor stocks and doubts about AI spending remain the main focus for markets.

Finance Minister Lee Hyoung-il said South Korea's growth is projected at around 3% this year, supported by solid chip exports and higher facility investment, with momentum expected to strengthen over the medium to long term. On the sidelines of the IMF and World Bank Group meetings in Bangkok, he briefed Moody's, Fitch and S&P Global Ratings on government-led growth initiatives, including three megaprojects, the green transition and the Future Fund launching next year. The rating agencies were keen to know how the government will use strong tax revenues from the chip supercycle, and noted stable economic indicators and sound public finances despite population aging and the war in the Middle East. Lee also signed memorandums of understanding with multilateral development banks, including EBRD and CABEI, to enhance cooperation on AI.

J.P. Morgan analyst Doug Anmuth raised his price target for Alphabet stock to $425, about 23% above the current price, betting that selling its custom TPU AI processors to other companies will accelerate cloud revenue. Google Cloud sales rose 82% to $24.8 billion in the second quarter of 2026, and Anmuth thinks cloud revenue could double in the third quarter. Piper Sandler's Thomas Champion estimates Google's processor sales could reach $104 billion by 2028, compared with Alphabet's total second-quarter revenue of $120 billion. Alphabet reported Q2 EPS of $9.11, up 294%, but some investors worry about its roughly $200 billion AI infrastructure spending this year. The stock trades at a trailing P/E of about 17, versus a tech sector average of 33.

Broadcom (AVGO), with a market value of US$1.6 trillion, is competing with other AI chip clients such as Nvidia and Apple for capacity at TSMC, which is expanding its advanced manufacturing and reporting record profits in 2026. The article argues that access to TSMC's leading-edge lines is key for Broadcom to keep its edge in custom XPU and networking chips while scaling its VMware-based Private AI Cloud. The bullish case is that securing long-term wafer supply would strengthen the outlook for multi-year demand for AI XPU and Ethernet products. The bearish side is that TSMC acts as a chokepoint for Broadcom's lowest-margin, most capital-intensive products, so any allocation shortfall or pricing shift could pressure gross margins.

Intel said Tesla has agreed to use its upcoming 14A manufacturing process as a foundry customer, and reported progress on output from its 18A node. The chipmaker also announced a US$20b equity raise to fund new factory buildouts tied to its foundry expansion. The article suggests Tesla's commitment shows chip buyers are willing to test Intel for advanced logic production, while heavy capital spending could weigh on free cash flow and delay foundry breakeven. Key signals to watch include whether Intel discloses more named 14A or 18A customers with meaningful dollar commitments, and whether Intel Foundry operating losses move toward management's late 2028 breakeven goal.

TSMC plans to spend $60 billion to $64 billion this year on factories and equipment, about a third of trailing-12-month revenue, which the article presents as a sign of coming growth. CFO Wendell Huang linked the spending to long-term customer demand, including agentic AI, and said spending from 2026 through 2028 should be significantly higher than in the previous three years. Third-quarter revenue reached a record $46.7 billion, up 41% year over year, with fourth-quarter guidance of $52.3 billion to $54.3 billion, and profit margin rose to 51.1% from 45.7%. The article notes geopolitical risks in Asia and says overseas plants such as Arizona cost more to run and may weigh on future margins. The stock trades at 19 times 2027 earnings estimates, with consensus calling for 28% earnings growth next year.

TSMC (TSM) shares rose 13.14% over the six months to October 15, following a record quarter in which revenue grew 41.2% to $46.7 billion and net income jumped 68.7%, mainly on AI-related chips. The company guides next-quarter revenue to $52.3–54.3 billion and full-year revenue growth of about 44%, with demand also coming from CPUs for AI servers and networking chips. Capex is planned at $60–64 billion for 2026 plus $100 billion for US expansion, while gross margin slipped from 67.7% to 66.4% during the 2nm ramp. The article warns that if customers cut AI spending before new fabs reach full production, both earnings estimates and valuation could come under pressure.

Broadcom (AVGO) closed at $344.33 on October 15 after returning -13.59% over six months, even though revenue in the latest quarter rose 85.5% and earnings grew 216.1% year over year. Most of that growth comes from custom chips designed for large technology companies, which are sticky because customers cannot switch suppliers without restarting engineering, while infrastructure software is a smaller business acquired through deals. Per CNN, analysts' median target sits 52.47% above the current price, while the stock is down 1.43% over twelve months. The article flags concentration risk, since the custom chip business depends on a few very large customers able to bring the work in-house, and notes a trailing P/E of 46.50x.

TSMC (TSM) closed at $422.25 on October 15 and has returned 16.21% over six months. The latest quarter was the strongest in the company's history, with revenue of $46.72 billion above management's earlier guidance and net profit up 68.7%, faster than revenue. Gross margin reached 66.4% while the company started mass production on its newest 2nm process, a stage that typically weighs on margins. The risks are a concentrated customer base, spending plans set more than a year ahead, and advanced plants located in Taiwan, whose political status is disputed. The shares trade at 21.41x expected earnings for next year versus 33.67x reported earnings.

NVIDIA (NVDA) closed at $217.23 on October 15 and has returned 9.52% over six months, trailing the 15.4% return of the Insider Monkey Billionaire Index and 11.4% of the State Street SPDR S&P 500 ETF Trust. Over the past year the stock rose 16.48%, while chipmaker Taiwan Semiconductor gained 43.10% and memory supplier Micron gained 360.14%. The article argues the business itself is sound: revenue in the latest quarter rose 105.9% year over year, earnings grew even faster, and operating margin stands at 66.24%. It says NVIDIA was repriced earlier in the cycle than its suppliers, whose earnings the market still treats as temporary. Shares trade at 24.88 times next year's expected earnings, against 28.51 times last year's, because earnings have climbed faster than the share price.

Marvell Technology (MRVL) closed at $241.24 on October 15 and has returned 80.88% over six months, well ahead of the 15.4% return of the Insider Monkey Billionaire Index and 11.4% of the State Street SPDR S&P 500 ETF Trust. According to CNN, 92% of analysts covering the stock rate it a buy, while the remaining 8% do not. The article says the holdouts are not doubting growth or Marvell's position, which is supported by 36.5% revenue growth in the latest quarter and a 174% share price gain over the past year. Their concerns centre on valuation: the stock trades at 62.11 times next year's expected earnings, the most demanding multiple in the article's list, while operating margin of 16.68% is modest against peers selling into AI. The article frames the disagreement as one about price rather than the health of the business.

SanDisk (SNDK) closed at $1,394.83 on October 15, giving it a market value of $265.98 billion, above the $170.78 billion of Western Digital, the parent that separated it out. The flash memory maker has grown sharply as AI-driven demand for data center storage pushed revenue up 371.6% from a year earlier in the latest quarter, and the shares are up 901.24% over twelve months. Operating margin reached 78.47% of revenue, but the article notes SanDisk has not yet operated through a full cycle on its own, and that producers' decisions to add capacity could later create oversupply. The stock trades at 8.04 times next year's expected earnings, far below its trailing multiple, and the article reads this as the market refusing to pay a premium for earnings that may not survive a full cycle.

Micron (MU) closed at $931.24 on October 15, with an operating margin of 80.68% and revenue up 379.3% from the same quarter last year. The article says these figures look nothing like a commodity business, citing that only three companies supply nearly all the working memory used in advanced computing and that building a new plant is very costly. However, it argues Micron may lack a durable moat, since standard memory does not lock in customers who can buy from any of the three suppliers, and history shows prices collapse once supply catches up with demand. Capacity decisions made today take two or three years to arrive. The stock trades at 7.02 times next year's expected earnings against 24.78 times over the past year, meaning analysts expect earnings to climb steeply again.

ASML, the only supplier of the machines that print the most advanced chip patterns, reported third-quarter net sales of 11.7 billion euros and net income of 5.0 billion euros on October 14. The bigger news is that the company does not expect to build enough machines to meet customer demand in 2027 or 2028. It is looking at ways to add capacity beyond the 30% increase it had already promised, and some customers are interested in orders for 2029 and 2030. Because ASML stopped publishing quarterly orders this year, that demand is closer to a statement of intent than a contract, and customer delays and government export rules are risks the company cannot control. The article argues the shortage, rather than the monopoly, better justifies the valuation, with shares at 28.90 times next year's expected earnings versus 59.89 times over the past year.

Applied Materials supplies equipment for more steps of chip manufacturing than most rivals, and the article says that breadth is the core of its case. Customers find it costly to switch because machines must be qualified and tuned to their processes, and selling many steps together gives the company deeper knowledge of each customer's process. Its operating margin of 33.74% and return on equity of 41.07% are cited as consistent with a strong position. The article identifies pressures: the most advanced patterning step is controlled by a single Dutch company that Applied does not compete with, a few large chipmakers can push hard on price, and government export rules decide which customers it may sell to. Applied trades at 23.42 times next year's expected earnings after rising 88.83% over twelve months.

Sandisk shares have surged 827% over the past year but dropped 44% from their June 22 52-week high, with fears over NAND flash demand, AI infrastructure spending and competition from China's CXMT. The author argues these fears are overblown, since CXMT doesn't make NAND flash and its DRAM technology reportedly trails Micron and SK Hynix. Enterprise SSD demand is booming on the back of the AI boom, with contract prices reportedly up 3x year over year, and McKinsey and IDC forecast annual growth of 35% and over 40% through 2030, respectively. Sandisk posted $20 billion in fiscal 2026 revenue with an 11% NAND market share, and its TAM is seen reaching $500 billion next year. The company targets mid-to-high teens annual revenue growth in fiscal 2028 to 2030 and a non-GAAP operating margin of 75% by fiscal 2030, versus 63% in fiscal 2026.

Many AI-leading stocks are pulling back after three years of strong gains, as investors worry about rising data-center funding costs and weaker-than-expected future demand. The iShares Semiconductor ETF is down more than 20% from its June peak and is in bear territory, weighing on the Nasdaq-100 and S&P 500. The author highlights two non-semiconductor AI stocks: Datadog (DDOG), whose revenue growth accelerated to 36% in Q2 and whose 2026 revenue forecast was raised by $140 million to $4.46 billion, though its P/S of 24.3 is well above its three-year average of 17.7. Palo Alto Networks (PANW) reported next-generation security ARR of $9 billion, up 63%, and targets $20 billion by fiscal 2030.

The author predicts Alphabet's Google Cloud revenue will more than double in the third quarter, after growth accelerated to 82% in the second quarter. Management says it is still capacity-constrained and expects to recognize half of its $514 billion revenue backlog over 24 months, averaging $32 billion per quarter. Alphabet is also expanding use of third-party neocloud capacity as a bridge, which CFO Anat Ashkenazi warned will pressure margins, and plans to sell TPU chips directly, with inventory rising to $10 billion from $2.4 billion. Reaching 100% growth would require revenue above $30.3 billion, about $5.5 billion more than in the second quarter. Investors remain concerned about negative free cash flow, and the stock trades at 26 times forward earnings.

TSMC's third-quarter revenue rose 41% year over year to $46.7 billion, with high-performance computing, which includes AI data center chips, making up 68% of sales. Management expects fourth-quarter revenue of $52.3 billion to $54.3 billion, about 58% year-over-year growth at the midpoint. CEO C.C. Wei said AI chip demand is still far above TSMC's supply capacity and that AI accelerator sales, forecast to grow at a mid- to high-50s percentage rate annually through 2029, will probably be higher, though TSMC is planning cautiously for 2027 and rising component prices could pressure its smartphone business, which accounted for 21% of third-quarter revenue. The stock, up about 39% year to date as of Oct. 15, 2026, trades at roughly 19 times analysts' 2027 earnings estimates, while Wall Street expects earnings to grow 38% annually over the next several years.