Bernstein said in a July 13 report that memory stocks have outperformed semiconductor equipment names by 661 percentage points since June 2025, raising a market concern over whether equipment shares would fall if memory reverses. Looking at a decade of historical data, the firm said the two groups have not been tightly linked over the long run, with correlation staying low and equipment stocks twice posting independent gains during weaker periods for memory. Those divergence windows lasted about two years each, according to the report.
Bernstein also pointed to a longer stretch from 2019 to mid-2025, when memory lagged equipment for six years, only catching up in February 2026 after reaching a 36x cumulative gain over 15 years. The report said memory then accelerated and built up excess returns to an extreme level. If mean reversion takes place, equipment names could see relative outperformance. Bernstein cited SK Hynix’s $67 billion expansion plan and said equipment orders represent more certain revenue. It kept Outperform ratings on Applied Materials, Lam Research and ASML, with price targets of $525, $340 and €2,300, respectively.
A July 13 Bernstein report said memory stocks have outperformed semiconductor equipment names by 661 percentage points since June 2025, a gap that has fueled concerns over whether equipment shares would drop if memory turns lower.
Drawing on 10 years of historical data, Bernstein said semiconductor equipment and memory are not tightly linked. Their long-term correlation has stayed low, and equipment stocks twice traded independently during periods when memory weakened.
Two divergence periods lasted about two years
According to the report, both periods of divergence lasted about two years, with equipment delivering notable relative outperformance. From 2019 to mid-2025, memory lagged equipment for six straight years and did not catch up until February 2026, when it matched equipment after posting a 36x cumulative gain over 15 years.
Bernstein said memory then accelerated and pushed excess returns to an extreme level. If mean reversion occurs, equipment stocks could benefit on a relative basis.
Bernstein kept Outperform calls on three names
The report also noted that SK Hynix has announced a $67 billion capacity expansion plan, while equipment orders represent more certain revenue. Bernstein maintained Outperform ratings on Applied Materials (AMAT), Lam Research (LRCX), and ASML, with price targets of $525, $340, and €2,300, respectively.
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