Bernstein: AI computing power continues to expand, semiconductor equipment valuations have upside potential

Deep Tide TechFlow news, according to Tide Research, Bernstein released a semiconductor equipment industry research report on July 20, 2026, estimating that AI data center capacity expansion will significantly drive equipment demand.

Institutional estimates show that for every additional 1GW of annualized computing power, this corresponds to $8 billion in equipment investment. If annual average additions reach 50GW, then from 2027 to 2029, cumulative global wafer equipment spending will exceed $700 billion, and the annualized scale will be close to $300 billion.

The market currently estimates that the industry’s annual demand is only $120 billion to $150 billion. If the pace of compute capacity buildout remains fast, the profitability of equipment leaders will substantially exceed market expectations. Based on the 50GW scenario, the 2028 forward P/E ratios of Applied Materials, Lam Research, and KLA are expected to fall to 15 to 18 times.

Among the target companies, institutions are most bullish on Applied Materials, assigning outperformance-the-market ratings to six companies including Lam Research, KLA, and ASML, while Screen maintains market performance.