JPMorgan: Buyer Expectations for 9 Semiconductor Stocks Exceed Guidance

According to Chaoxiang Research’s buy-side survey conducted by J.P. Morgan on August 3, most buy-side analysts expect results above company guidance across nine semiconductor and hardware companies. For ON Semiconductor (ON), the buy-side consensus for Q2 revenue was $1.61 billion (guidance: $1.59 billion), gross margin at 39.5% (guidance: 39.0%), and EPS at $0.75 (guidance: $0.71). For fiscal year 2027, the buy-side consensus for EPS is $3.57 (guidance: $3.11). Approximately 60% of respondents expect ON to slightly raise its 2026 AI revenue target (currently around $500 million). After a ~25% pullback, ON has shifted from net short to slightly net long, with earnings-implied volatility at 7.5%. For the other eight companies—AMAT, AMD, ANET, COHR, CSCO, LITE, SNDK, and WDC—the buy-side consensus for revenue, gross margin, and EPS all exceeded company guidance. J.P. Morgan believes that the significant pullback in the semiconductor sector was driven by July’s AI momentum unwinding; however, buy-side expectations for earnings remain robust, creating a contrast with the pessimistic market sentiment. AMAT’s earnings-implied volatility at 18% is notably higher than its historical average, indicating that the bar for upside surprises is rising. ON is an exception: its AI expectations are extremely low, leaving significant room for positive earnings surprises.