Bernstein says equipment stocks do not need memory to fall
Bernstein said in a July 13 note that semiconductor equipment names have their own upside case even if memory stocks move sideways. The call follows a sharp run in memory, which has outperformed chip equipment by 661 percentage points since June 2025. The question for investors is whether equipment makers would slide as well if memory pulls back.
Bernstein’s answer was based on historical data, not on a call that memory prices or memory stocks must decline. The firm reviewed more than a decade of share-price performance for three large memory companies — Samsung, SK Hynix, and Micron — and five major equipment makers: Applied Materials, Lam Research, ASML, KLA, and Tokyo Electron.
Correlation with memory has been lower than many investors assume
According to the report, the average rolling correlation between memory and equipment was only 0.4 from 2012 to 2018. After 2019, that figure increased, but only to 0.6. By comparison, equipment stocks tracked the Philadelphia Semiconductor Index much more closely, with correlations of 0.8 to 0.9 over the same period.
That distinction matters. Bernstein’s reading is that equipment stocks tend to follow the broader semiconductor sector, while memory often moves off on its own path.
History shows long periods when equipment rose and memory fell
The note pointed to two extended divergence windows. From January 2015 to December 2016, the five equipment companies gained 21.9% while memory fell 16.2%, leaving equipment ahead by 38.2%. From January 2021 to December 2022, equipment rose 15.3% and memory dropped 34%, a relative outperformance of 49%.
Both stretches lasted about two years. Bernstein said that pattern suggests memory and equipment can move in different directions for long periods, which also gives them a diversification role inside a portfolio rather than forcing them into a single trade.
After a 661-point gap, the firm sees room for mean reversion
Over a longer horizon, Bernstein said returns for memory and equipment were roughly similar from 2011 to 2019. From 2019 to June 2025, memory underperformed equipment, only catching up in February 2026. Over that 15-year span, both had risen 36 times. Memory then accelerated and has since built a 661-percentage-point lead over equipment.
Bernstein’s core argument is that if mean reversion starts to play out, the next leg of relative performance could favor equipment.
Long-term support for equipment remains in place
The report also cited capital spending plans. SK Hynix recently announced an additional 100 trillion won investment, about $67 billion, for a new wafer fab in Cheongju. It added that the South Korean government is considering support for Samsung and SK Hynix as they build wafer fabs in the country’s southwest region.
Bernstein said that even if memory pricing normalizes in 2027, foundry investment and memory capacity expansion can still support continued growth for equipment suppliers. The firm expects room for upward revisions to both equipment market forecasts and company EPS through 2028.
Source note
This article is based on Chaoxiang Research’s summary and interpretation of a Bernstein report dated July 13, 2026. Ratings, price targets, earnings forecasts, and related judgments cited in the report reflect the views of the brokerage’s analysts and their institution, not the view of Chaoxiang Research, and do not constitute investment advice.
