Concerns about AI return on investment can't hold back the wave of semiconductor devices! Jefferies is determined to sing a lot: industry growth is expected to continue until 2028

The Zhitong Finance App learned that investment bank Jefferies predicts that although market concerns about artificial intelligence (AI) investment, data center construction, and memory chip prices are putting pressure on the semiconductor industry, the semiconductor equipment market will continue to expand until 2028.

When semiconductor companies and semiconductor manufacturers announced their latest quarterly results, their level of optimism about business fundamentals increased. At the same time, however, the stock market's concerns about future risks have widened, further widening the gap between current performance and stock price expectations. The market has always been concerned about issues such as whether the capital expenditure of hyperscalers (hyperscalers) can be sustained, power supply restrictions and data center construction delays, financial relationships among major AI companies, and high memory chip prices. The market's questions about the return on investment in generative AI and the risks posed by increasingly highly autonomous AI systems have also resurfaced.

However, Jefferies anticipates that the continued popularity of AI applications will support the demand for graphics processing units (GPUs), custom chips, central processing units (CPUs), power semiconductors, and other components used in data centers. The bank also expects demand for memory chips to continue to grow. Long-term supply agreements signed between semiconductor companies and customers have increased the visibility of medium-term demand and supported equipment makers' expectations that the industry will continue to grow until 2028.

Jefferies expects the wafer manufacturing equipment market to reach a maximum of 200 billion US dollars by 2027 and about 220 billion US dollars by 2028. These two figures may fall short of investors' expectations of reaching 200 billion US dollars and 250 billion US dollars respectively. Despite this, the market should continue to grow strongly and continue until 2028.

In terms of individual stocks, Jefferies gave Applied Materials (AMAT.US), Fanlin Group (LRCX.US), Nvidia (NVDA.US), CoreWeave (CRWV.US), Meta (META.US), Microsoft (MSFT.US), and Amazon (AMZN.US) “buy” ratings. The bank gave ASML.US (ASML.US) and SCREEN Holdings (DINRF.US) a “holding” rating.