Goldman Sachs Names Applied Materials, Seagate, Microchip Top Semiconductor Picks Before Earnings

Goldman Sachs named Applied Materials (AMAT), Seagate Technology (STX) and Microchip Technology (MCHP) as its "top tactical picks" ahead of semiconductor earnings, analyst James Schneider said. The Philadelphia Semiconductor Index has fallen 11% over the past two months while the S&P 500 gained 4% over the same period. Goldman expects earnings estimates for most semiconductor stocks to be revised higher. Schneider expects Applied Materials to raise margin targets at the SEMICON West conference on Oct. 13 and to report strong quarterly results in mid-November, citing DRAM and advanced logic demand. The stock is up about 12% in the past week and 110.14% year to date. Goldman forecasts Seagate revenue about 2% above Wall Street estimates, helped by firm hard-drive prices and HAMR technology. Seagate shares have risen 208.29% this year. Microchip is expected to benefit from data center, aerospace and defense demand, with gross margins recovering to about 66% by the end of 2026. The stock is up 27.62% year to date.