- The thesis for the semiconductor upcycle not only remains firmly intact but continues to surprise on the upside. In a single quarter, Gartner has revised its global semiconductor revenue forecast to hit US$1.3trn this year, from US$1trn in earlier forecasts, citing AI and memory tailwinds.
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- year-to-date outperformance of second-order stocks versus key AI and memory bellwethers.
Upward revisions to equipment makers.
- Analysts have also turned more positive, as reflected in upward revisions to revenue since the start of 2026. While the memory segment unquestionably saw the sharpest revisions on the back of AI-led shortage, we note that equipment makers (both front-and back-end) were next – suggesting market optimism as potential beneficiaries of the dual memory and AI-led tailwinds.
Valuation catch-up with more room to run.
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- With the overall uptrend/outlook reaffirmed in the latest FY25 results, local tech stocks have performed well, attracting strong investor interest, amid the unfolding Middle East conflict. Even with the recent run-up, there remains a substantial valuation gap to global peers, alongside more attractive relative valuations for AEM and UMS.
Stock Picks
UMS (SGX:558)
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