1、7T2se3r0Ot6kwoPa7T2se3r0Ot6kwoPaDistributed on:21/07/2025 21:42:05 GMTDistributed on:21/07/2025 21:42:05 GMT21 July 2025Deutsche BankResearch North America United States TMT Semicap Equipment Industry US Semicap Equipment Date Forecast Change 2Q25 Preview:Between a rock and a hard placeSemicap stock

2、s have dramatically improved off their Liberation Day lows(up+50-70%),in-line with the SOX(+60%)and well above the S&P(+24%)over the same time period.While the(partial)removal of trade uncertainties is welcome,we still see a high degree of fundamental uncertainty across the US semicaps in our covera

3、ge and view valuations as challenging.This setup leaves us in what we view to be a“goldilocks”scenario,but one where nothing is“just right”.Those with stable or positive fundamental outlooks already trade at rich valuations,while the cheaper names carry somewhat elevated fundamental risk.All told,we

4、 retain our Hold ratings across the three large US semicaps in our coverage(see our recent KLAC downgrade here),and we see greater opportunity for incremental alpha in our small cap names.We highlight recently-upgraded MKSI as our top pick into this earnings season,as we believe the reversal of comp

5、any-specific inventory headwinds should offer outsized exposure to broader WFE trends at a discount valuation.With this note,we are tweaking up price targets across the group to reflect the strong multiple expansion seen throughout the quarter(details below).2H25 in questionThe key question for us g

6、oing into this earnings season is each companys revenue outlook into C2H25.Each of the large cap US semicaps seemingly has differing views on C2H25,with Street modeling LRCX revs down h/h,KLAC flat h/h,and AMAT up h/h.We chalk these differences up to two dynamics:1)varying end market exposure,and 2)