Catenaa, Sunday, November 15, 2026- Earnings for semiconductor stocks are forecast to grow by 65% in 2027 despite the sector’s recent pullback.
Standard Chartered said that despite this outlook, recent regulatory and corporate governance concerns are weighing on sentiment.
“Potential state-level restrictions on data center development following the recent US mid-term election results could weigh on semiconductor demand growth,” the bank said.
However, Standard Chartered believes that these risks are manageable and continued AI adoption should support demand for AI inference. “We prefer diversified exposure to quality semiconductor companies with durable demand and strong volume growth,” it added.
Standard Chartered favors financially resilient US technology giants that can fund AI expansion through internally generated cash flows. The bank believes these companies are better positioned to withstand market volatility and rising financing costs.
“Our US IT opportunistic idea combines these preferences through exposure to semiconductors, software, and hardware, allowing investors to participate in a potential recovery across a broader range of earnings drivers,” it added.
Standard Chartered said its recently introduced US technology investment strategy has delivered positive results despite volatility surrounding several major technology companies.
The bank said that attractive valuations support further upside, as investors are rotating within IT from semiconductors, affected by concerns over the pace of AI data center buildout and Nvidia’s troubles, towards software and hardware providers.
“The latter have strong cash flows and balance sheets and are likely to benefit from AI monetization. Together, they account for more than 60% of the IT sector,” the bank added.
Further, Standard Chartered said that US healthcare earnings are projected to grow by 22.5% in 2027, the second-fastest among MSCI US sectors, driven by improving biopharma earnings.
The US healthcare sector’s valuation gap against the broader market has been recovering from a steep historical discount a year ago.
“The sector’s forward price-to-earnings (P/E) ratio of c. 20x now exceeds the broader US market’s c. 18.4x, but we see scope for the valuation to be supported amid investor demand for defensive growth,” the bank said.
