Morgan Stanley: Semiconductors enter a profit-driven era, highlighting three stocks with significant upside potential

On May 9, Morgan Stanley released a report stating that even though the iShares Semiconductor ETF (SOXX-US) has surged nearly 57% year-to-date through 2026, the uptrend in the industry has not yet peaked, and the real profit-driving factors will take the baton to push stock prices even higher. The report emphasized that the semiconductor industry is shifting from growth driven solely by AI concepts to a recovery jointly powered by AI and traditional cyclical demand.

Morgan Stanley specifically singled out three representative companies in quantum computing, microcontrollers, and the foundry segment—IonQ (IONQ.US), Microchip Technology (MCHP.US), and GlobalFoundries. Morgan Stanley raised IonQ’s price target from $38 to $47. Although IonQ currently has a smaller base, with quarterly revenue of about $11 million to $12 million, Morgan Stanley believes that its 2026 revenue path has become clearer. Morgan Stanley sharply increased Microchip Technology’s price target from $69 to $92, as the company is positioned to turn the recovering demand into faster profit growth. Morgan Stanley raised GlobalFoundries’ price target from $47 to $58, saying the company has built a more durable and long-lasting product portfolio through stable chip-technology pricing and its leading position in silicon photonics technology.