Qualcomm Q3 earnings to spotlight AI data center push amid smartphone slump

Goldman Sachs strategist Ben Snider says the AI stock rally hinges on hyperscalers like Oracle and Amazon delivering another quarter of accelerating cloud computing adoption this earnings season. In a new note, Snider said Goldman's equity analysts expect year over year cloud revenue growth to increase from 48% in Q2 to 55% in Q3, after last quarter's accelerating cloud revenue growth and large revenue backlogs signaled monetization of capex investments. Micron offered an early validating sign last week, beating sales and profit forecasts for the quarter on voracious AI-driven demand, with guidance also strong; the memory chipmaker added about $43 billion in sales in the most recent quarter compared to the year-ago quarter, and operating margins exploded in all business segments. Executives told analysts on the earnings call that high chip prices and tight capacity would be the name of the game through 2028. D.A. Davidson analyst Gil Luria said expectations for tightening supply-demand conditions through both 2027 and 2028 meaningfully extend the industry's runway for strong pricing and earnings growth, addressing a key investor concern that current fundamentals represent a cyclical peak.

Goldman Sachs named Applied Materials, Seagate and Microchip as tactical ideas heading into third-quarter earnings, saying it sees a more constructive trading setup for semiconductor stocks after a sector pullback it attributed to significant de-risking. Analysts led by James Schneider said the sector has fallen sharply over the past two months, with the SOX index down 11% against a 4% gain for the S&P 500, in stark contrast to the 2Q setup when the bank signaled a more cautious tactical outlook ahead of results. Goldman expects Applied Materials to raise its margin targets and give a robust growth outlook at SEMICON West on October 13, ahead of mid-November earnings, with a strong report driven by DRAM and advanced logic and management speaking to a wafer fab equipment market growing toward $300 billion over time, though the stock rallied about 12% in the past week so expectations are elevated. For Seagate, Goldman forecasts a strong quarter on positive hard disk drive pricing and a supportive demand environment, projecting about 2% revenue upside and guidance roughly 3% above the Street, citing prudent supply strategy and advanced HAMR progress relative to competitors. Goldman also expects broad strength across end markets for Microchip, led by datacenter and aerospace and defense, with about 1% revenue upside and gross margin recovering to roughly 66% by the end of 2026, and its fiscal 2027 earnings estimate about 3% above consensus. The bank flagged downside risk tactically for Qualcomm, KLA and Western Digital, all rated Neutral, saying Qualcomm may be ahead of itself given strong expectations tied to agentic AI, KLA's results may lag peers as spending skews toward DRAM, and Western Digital should underperform Seagate.

SCB Asset Management, or SCBAM, is offering three new retirement mutual funds, or RMFs, between October 5 and 12, 2026, to give investors more options for planning their retirement alongside tax-deduction benefits. The funds focus on themes with long-term growth potential, including the semiconductor industry, the South Korean stock market and Asian equities excluding Japan. The first fund is the SCB Semiconductor Retirement Mutual Fund, or SCBRMSEMI, which invests through the VanEck Semiconductor UCITS ETF, tracking the MarketVector US Listed Semiconductor 10% Capped Screened Index, with leading companies such as NVIDIA, TSMC, Broadcom and ASML as key components of the investment theme. The second is the SCB Korean Equity Retirement Mutual Fund, or SCBRMKEQ, which invests through the iShares MSCI Korea UCITS ETF, tracking the MSCI Korea 20/35 Index, focusing on opportunities in the technology, semiconductor and advanced technology industries, particularly the DRAM, HBM and NAND memory markets tied to AI development. The third is the SCB Asia ex Japan Equity Index Retirement Mutual Fund, or SCBRMAXJ, which invests through the iShares Core MSCI Asia ex Japan ETF, tracking the MSCI All Country Asia ex Japan Index, spreading investments across large- and mid-cap Asian stocks excluding Japan and covering key markets such as Taiwan, South Korea, China and India. Narongsak Plodmechai, chief executive officer of SCBAM, said that although global investment markets continue to face volatility from monetary policy direction, the global economy and geopolitical factors, SCBAM maintains a positive view on long-term investment in industries driven by the new economic structure, especially artificial intelligence, semiconductors and Asian stock markets that play an important role in the global technology supply chain. All three RMF funds will be open for their initial offering between October 5 and 12, 2026, and investors can continue investing from October 14, 2026 onward.

Micron reported fiscal Q4 revenue of $54.23 billion, up from $11.32 billion a year earlier, with non-GAAP earnings of $33.42 a share and non-GAAP gross margin of 87.0% versus 45.7% a year earlier. The company's Core Data Center unit generated $18.00 billion of revenue at a 90% gross margin, compared with $1.58 billion a year ago, and Micron is the only U.S.-based maker of high-bandwidth memory, working with Nvidia on the first custom HBM design. Micron has signed Strategic Customer Agreements, and noncurrent customer contract liabilities rose to $12.9 billion from $568 million a quarter earlier, while customer deposits brought in $12.75 billion during fiscal 2026. Fiscal 2026 operating cash flow was $89.68 billion and adjusted free cash flow was $62.31 billion, with fiscal Q1 2027 guidance calling for $61.5 billion of revenue plus or minus $1.5 billion and $38.15 of non-GAAP EPS plus or minus $1. Micron spent $27.37 billion net on capital projects in fiscal 2026, up from $13.80 billion in fiscal 2025, and at about 6 times expected earnings the stock trades far below its five-year average P/E of 74.27, with 184 hedge funds holding the stock in the most recent quarter, up from 154.