Since the start of 2026, the S&P 500 has risen by just 1%. However, three stocks that have overperformed during this period on Wall Street are in the semiconductor equipment sector: Lam Research (up 27.6%), Applied Materials (up 25.8%) and KLA (up 24.6%). Over the same period, two Israeli dual-traded semiconductor equipment companies Nova Ltd. (Nasdaq:NVMI; TASE:NVMI) and Camtek (Nasdaq: CAMT; TASE: CAMT) have risen 38% and 34% respectively.
Both Israeli companies have developed equipment used for testing during the chip manufacturing process. Due to the accelerated development of artificial intelligence (AI), demand for chips and therefore the equipment has increased in recent years.
Both companies are trading at near record levels. Nova, led by CEO by Gabi Waisman, has a market cap of $13.7 billion, while Camtek, under CEO Rafi Amit, has a market cap of $6.6 billion,
According to Yahoo Finance, among the ten largest companies in the sector traded on Wall Street, Nova has recorded the sharpest increase in share price since the beginning of the year, and Camtek the third largest increase. This follows a double-digit increase in both stocks in 2025.
What explains the momentum in chip equipment stocks? It seems that expectations are high due to increased demand, and that the upcoming financial reports could signal the continuation of the trend in stocks.
A rise in investments
Investment bank Cantor wrote earlier this month that there is still room for the sector’s rally to continue, and in their base case scenario, expected spending on wafer fabrication equipment (WFE) will reach $160 billion this year. This is compared with a previous forecast of $135 billion, and with a good chance of an upside. Bank of America’s forecast is for more modest growth – to $131 billion this year (9.7% higher than 2025), and continued growth to $150 billion in 2027 and $155 billion in 2028, based on the strength of the memory market.
According to market estimates, in addition to the large demand for memory chips, there is a large demand for advanced packages and processors to support data centers, and a shortage of production capacity to meet the demand. Therefore, there is an increase in investment budgets to catch up with demand, and it is estimated that demand will also be linked to production equipment and process control.
According to Cantor analysts C.J. Muse and Matthew Frisco, the AI infrastructure investment cycle is only just beginning, and is expected to accelerate between 2026 and 2028. Cantor believes that the surge will have a positive impact on all the big names in the sector: KLA, Lam Research and ASML, although the recommendations for smaller companies are more varied. In a review this week, Cantor estimated that these three companies will present a Beat & Raise in their upcoming reports. In their assessment, there has been major improvement in orders from these three companies in recent weeks, which supports the upside for 2026. They also mention a strong AI computing cycle that provides improved visibility for 2027.
RELATED ARTICLES
Nova stock soars to new peak
“Mega cycle in the industry”
On Nova’s stock, Cantor says its risk/reward ratio is balanced ahead of the upcoming reports, and it remains interesting for the long term and is recommended with “excess returns.” Camtek, in their assessment, may have a downside, due to uncertainty on the timing of orders alongside high pricing per share, and they believe that without significant orders in the coming quarter it will be difficult to justify the pricing. Their recommendation for Camtek is “neutral.”
Bank of America raised its price targets for both Israeli stocks this month: Nova to $450 (a price it has since surpassed) and Camtek to $160 (11.4% above the current price).
Published by Globes, Israel business news – en.globes.co.il – on January 27, 2026.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2026.
