Ichor Holdings Ltd

Ichor Holdings provided third-quarter revenue guidance of $315 million to $345 million with a gross margin range of 14.5% to 15.5%. The company expects second-half revenue volumes to be at least 25% higher than the first half, supported by current demand forecasts and supply chain readiness. Second-quarter revenue rose 15% sequentially to $294.8 million, while gross margin improved 130 basis points to 14.1%, exceeding the high end of guidance. Ichor also completed a $200 million at-the-market equity offering, generating net proceeds of approximately $195 million, and ended the quarter with $256 million in cash and equivalents. Management reiterated a pace of 100 basis points of gross margin expansion per quarter for the remainder of the year and highlighted capacity to support $500 million in quarterly revenue, with plans to expand to upwards of $3 billion annually.

Ichor Holdings is entering a stronger demand phase as semiconductor equipment spending improves and AI-related chip investment lifts activity in wafer fabrication. The company designs and manufactures fluid delivery subsystems and precision components for semiconductor capital equipment, with key customers including Lam Research and Applied Materials, which together accounted for 76% of 2025 revenues. AI infrastructure, advanced logic, and high-bandwidth memory are driving a favorable wafer fab equipment cycle that favors etch and deposition tools, where Ichor has significant exposure. Management is pursuing margin improvement through vertical integration, shifting manufacturing to lower-cost facilities in Mexico and Malaysia, and increasing proprietary content from 15% in 2024 to a target of 35% by the end of 2026. First-quarter 2026 results showed early operating leverage, with revenues rising 15% sequentially to $256.1 million and non-GAAP EPS reaching 15 cents, up from one cent in the prior quarter. Despite the improving business setup, ICHR currently carries a Zacks Rank #4 (Sell), reflecting weak near-term positioning over the one-to-three-month horizon, and its Style Scores show a mixed profile with a Momentum Score of B but a Value Score of F and a VGM Score of D.

Stifel raised its price targets on semiconductor equipment makers Applied Materials, KLA, and Lam Research, citing a prolonged demand cycle driven by agentic AI. The firm increased its Applied Materials target to $650 from $530, KLA to $270 from $191, and Lam Research to $425 from $325, while maintaining Buy ratings on all three. Analysts project wafer fab equipment spending of $145 to $150 billion in 2026, rising to $192 billion in 2027 and $225 billion in 2028, supported by memory supply contracts with favorable pricing structures. Stifel also raised targets on Ichor Holdings to $115 from $76 and Cohu to $70 from $50, both rated Buy.