The artificial intelligence (AI) infrastructure trade has shifted from pure-play semiconductors to other AI-powered data center infrastructure. The global semiconductor manufacturing equipment and materials industry is growing by leaps and bounds, buoyed by AI-driven capital expenditure in leading-edge logic, high-bandwidth memory (“HBM”) and Test and Packaging components.
On July 14, SEMI reported in its Mid-Year Total Semiconductor Equipment Forecast – OEM Perspective that the market size of this industry is expected to reach a record high of $165.9 billion globally in 2026, up 23.2% year over year. The momentum is set to continue in the near term, reaching an estimated $229.5 billion globally in 2028.
Here, we recommend three stocks from this space for investment to enhance your portfolio returns in the short-term. These companies are: Amkor Technology Inc., Ultra Clean Holdings Inc. and FormFactor Inc. Each of our picks currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our two picks year-to-date.
Amkor Technology Inc.
Amkor has been benefiting from accelerating AI and HPC packaging demand. Computing revenues were reported at a record level in the second quarter of 2026, up approximately 26% year over year.
AMKR’s Advanced products were reported at $1.557 billion, up 26.79% year over year, reflecting a sustained mix shift toward higher value offerings. Automotive and Industrial revenue also reached a record level, supported by ADAS demand and increasing semiconductor content in next-generation vehicle platforms.
AI-Fueled Growth
Management pointed to accelerating Computing growth of nearly 30% sequentially in the third quarter, driven by AI-powered data center demand and the continued ramp of the HDFO CPU program, partly offset by a high single-digit sequential decline in Communications tied to the planned SiP transition from Korea to Vietnam and the ongoing memory supply constraints.
Recently announced 10-year strategic partnerships with Taiwan Semiconductor Manufacturing Co. Ltd. and a multi-year agreement with NVIDIA Corp. are reinforcing the company's long-term advanced packaging growth trajectory.
Robust Estimate Revisions
Amkor has an expected revenue and earnings growth rate of 14% and 73.3%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 25% over the last 60 days.
AMKR has an expected revenue and earnings growth rate of 11.8% and 4.3%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 25.9% over the last 60 days.
Huge Price Upside Potential
The stock price has rallied 25.5% year to date. Despite this, AMKR currently has a forward P/E of 19.73X for the current financial year, well below the industry average of 35.91X. The short-term average price target of brokerage firms represents an increase of 47.6% from the last closing price of $49.53. The brokerage target price is currently in the range of $60-90. This indicates a maximum upside of 81.7% and no downside.
Ultra Clean Holdings Inc.
Ultra Clean develops and supplies critical subsystems, components and parts, and cleaning and analytical services for the semiconductor industry in the United States and globally. UCTT offers outsourced solutions for the development, design, component sourcing and cleaning, prototyping, engineering, and manufacturing and testing of advanced systems.
Innovative Products
UCTT offers its customers an integrated outsourced solution for gas delivery systems and other subassemblies, improved design-to-delivery cycle times, component-neutral design and manufacturing and component testing capabilities.
Customers of UCTT are primarily original equipment manufacturers for the semiconductor capital equipment, flat panel, solar and medical device industries. Management said customers are sharing longer-range forecasts as system complexity and manufacturing requirements increase. UCTT sees opportunities to capture more outsourced subsystem work as customers prioritize final integration and testing capacity.
Solid Estimate Revisions
Ultra Clean has an expected revenue and earnings growth rate of 32.1% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 23.6% over the last 30 days.
UCTT has an expected revenue and earnings growth rate of 36.9% and more than 100%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 33.9% over the last 30 days.
Massive Price Upside Potential
The stock price has soared 180.8% year to date. Despite this, UCTT currently has a forward P/E of 24.67X for the current financial year, below the industry average of 28.95X. The short-term average price target of brokerage firms represents an increase of 92.6% from the last closing price of $71.13. The brokerage target price is currently in the range of $120-$150. This indicates a maximum upside of 110.9% and no downside.
FormFactor Inc.
FormFactor is benefiting from robust growth in HBM driven by the rapid adoption of generative AI and high-performance computing. FORM’s strong market position in DRAM, particularly with HBM, is driven by robust demand and the ramp-up of new chip designs like HBM4, expected to further fuel growth in 2026 and beyond.
Strong Market Opportunities
FormFactor benefits as advanced packaging and high-performance compute increase the number and complexity of semiconductor test insertions. Advanced packaging continues to increase test complexity in DRAM, especially as HBM moves to higher speeds. In second-quarter 2026, DRAM revenues reached a record $85 million, with HBM contributing about two-thirds of the total. Management expects third-quarter 2026 DRAM revenues to remain comparable sequentially despite a mix shift toward DDR.
FORM’s Foundry and logic revenues increased to $121.8 million in the second quarter from $111.2 million in the first quarter, led primarily by data-center CPU demand on top of networking, custom ASIC, PC and mobile activity. Management expects continued growth in Q3 across its served applications.
Co-packaged optics (CPO) is moving from development toward higher-volume production and is supporting Systems growth. The opportunity is tied to growing CPO chip volumes and FORM’s position at the first wafer-level test insertion for photonic integrated circuits.
Solid Estimate Revisions
FormFactor has an expected revenue and earnings growth rate of 31.2% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.7% over the last 30 days.
FORM has an expected revenue and earnings growth rate of 9.6% and 18.4%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 4.3% over the last 30 days.
Robust Price Upside Potential
The stock price has jumped 100.9% year to date. Despite this, the short-term average price target of brokerage firms represents an increase of 23.6% from the last closing price of $112.12. The brokerage target price is currently in the range of $64-$175. This indicates a maximum upside of 56.1% and a downside of 42.9%.
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The Zacks Analyst Blog Highlights Amkor Technology, Ultra Clean, FormFactor, Taiwan Semiconducto and NVIDIA
For Immediate Release
Chicago, IL – September 14 2026 – Zacks.com announces the list of stocks and ETFs featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Amkor Technology Inc. (AMKR - Free Report) , Ultra Clean Holdings Inc. (UCTT - Free Report) , FormFactor Inc. (FORM - Free Report) , Taiwan Semiconductor Manufacturing Co. Ltd.((TSM - Free Report) ) and NVIDIA Corp. (NVDA - Free Report) .
Here are highlights from Monday’s Analyst Blog:
3 Top-Ranked AI Semiconductor Equipment Stocks Amid Huge Price Upside
The artificial intelligence (AI) infrastructure trade has shifted from pure-play semiconductors to other AI-powered data center infrastructure. The global semiconductor manufacturing equipment and materials industry is growing by leaps and bounds, buoyed by AI-driven capital expenditure in leading-edge logic, high-bandwidth memory (“HBM”) and Test and Packaging components.
On July 14, SEMI reported in its Mid-Year Total Semiconductor Equipment Forecast – OEM Perspective that the market size of this industry is expected to reach a record high of $165.9 billion globally in 2026, up 23.2% year over year. The momentum is set to continue in the near term, reaching an estimated $229.5 billion globally in 2028.
Here, we recommend three stocks from this space for investment to enhance your portfolio returns in the short-term. These companies are: Amkor Technology Inc., Ultra Clean Holdings Inc. and FormFactor Inc. Each of our picks currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our two picks year-to-date.
Amkor Technology Inc.
Amkor has been benefiting from accelerating AI and HPC packaging demand. Computing revenues were reported at a record level in the second quarter of 2026, up approximately 26% year over year.
AMKR’s Advanced products were reported at $1.557 billion, up 26.79% year over year, reflecting a sustained mix shift toward higher value offerings. Automotive and Industrial revenue also reached a record level, supported by ADAS demand and increasing semiconductor content in next-generation vehicle platforms.
AI-Fueled Growth
Management pointed to accelerating Computing growth of nearly 30% sequentially in the third quarter, driven by AI-powered data center demand and the continued ramp of the HDFO CPU program, partly offset by a high single-digit sequential decline in Communications tied to the planned SiP transition from Korea to Vietnam and the ongoing memory supply constraints.
Recently announced 10-year strategic partnerships with Taiwan Semiconductor Manufacturing Co. Ltd. and a multi-year agreement with NVIDIA Corp. are reinforcing the company's long-term advanced packaging growth trajectory.
Robust Estimate Revisions
Amkor has an expected revenue and earnings growth rate of 14% and 73.3%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 25% over the last 60 days.
AMKR has an expected revenue and earnings growth rate of 11.8% and 4.3%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 25.9% over the last 60 days.
Huge Price Upside Potential
The stock price has rallied 25.5% year to date. Despite this, AMKR currently has a forward P/E of 19.73X for the current financial year, well below the industry average of 35.91X. The short-term average price target of brokerage firms represents an increase of 47.6% from the last closing price of $49.53. The brokerage target price is currently in the range of $60-90. This indicates a maximum upside of 81.7% and no downside.
Ultra Clean Holdings Inc.
Ultra Clean develops and supplies critical subsystems, components and parts, and cleaning and analytical services for the semiconductor industry in the United States and globally. UCTT offers outsourced solutions for the development, design, component sourcing and cleaning, prototyping, engineering, and manufacturing and testing of advanced systems.
Innovative Products
UCTT offers its customers an integrated outsourced solution for gas delivery systems and other subassemblies, improved design-to-delivery cycle times, component-neutral design and manufacturing and component testing capabilities.
Customers of UCTT are primarily original equipment manufacturers for the semiconductor capital equipment, flat panel, solar and medical device industries. Management said customers are sharing longer-range forecasts as system complexity and manufacturing requirements increase. UCTT sees opportunities to capture more outsourced subsystem work as customers prioritize final integration and testing capacity.
Solid Estimate Revisions
Ultra Clean has an expected revenue and earnings growth rate of 32.1% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 23.6% over the last 30 days.
UCTT has an expected revenue and earnings growth rate of 36.9% and more than 100%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 33.9% over the last 30 days.
Massive Price Upside Potential
The stock price has soared 180.8% year to date. Despite this, UCTT currently has a forward P/E of 24.67X for the current financial year, below the industry average of 28.95X. The short-term average price target of brokerage firms represents an increase of 92.6% from the last closing price of $71.13. The brokerage target price is currently in the range of $120-$150. This indicates a maximum upside of 110.9% and no downside.
FormFactor Inc.
FormFactor is benefiting from robust growth in HBM driven by the rapid adoption of generative AI and high-performance computing. FORM’s strong market position in DRAM, particularly with HBM, is driven by robust demand and the ramp-up of new chip designs like HBM4, expected to further fuel growth in 2026 and beyond.
Strong Market Opportunities
FormFactor benefits as advanced packaging and high-performance compute increase the number and complexity of semiconductor test insertions. Advanced packaging continues to increase test complexity in DRAM, especially as HBM moves to higher speeds. In second-quarter 2026, DRAM revenues reached a record $85 million, with HBM contributing about two-thirds of the total. Management expects third-quarter 2026 DRAM revenues to remain comparable sequentially despite a mix shift toward DDR.
FORM’s Foundry and logic revenues increased to $121.8 million in the second quarter from $111.2 million in the first quarter, led primarily by data-center CPU demand on top of networking, custom ASIC, PC and mobile activity. Management expects continued growth in Q3 across its served applications.
Co-packaged optics (CPO) is moving from development toward higher-volume production and is supporting Systems growth. The opportunity is tied to growing CPO chip volumes and FORM’s position at the first wafer-level test insertion for photonic integrated circuits.
Solid Estimate Revisions
FormFactor has an expected revenue and earnings growth rate of 31.2% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.7% over the last 30 days.
FORM has an expected revenue and earnings growth rate of 9.6% and 18.4%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 4.3% over the last 30 days.
Robust Price Upside Potential
The stock price has jumped 100.9% year to date. Despite this, the short-term average price target of brokerage firms represents an increase of 23.6% from the last closing price of $112.12. The brokerage target price is currently in the range of $64-$175. This indicates a maximum upside of 56.1% and a downside of 42.9%.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.