Tech Stocks Lead Fair Value Upgrades Following Strong Earnings
Chicago, Thursday, 20 August 2026.
Morningstar raised fair value estimates for U.S. stocks by 1.5% in Q2, with technology leading gains as semiconductor equipment giant ASML surged to a $2,050 valuation.
Fair Value Revisions Across Technology Sector
Financial research firm Morningstar increased fair value estimates across several major technology firms by an average of 1.5 percent during the second-quarter earnings season [1]. This adjustment highlights sustained institutional confidence in chip supply chain infrastructure and enterprise hardware spending, despite a deceleration from the 2.8 percent average increase seen in the first quarter of 2026 [1]. As of 18 August 2026, approximately 90 percent of the 835 US-listed stocks covered by Morningstar have reported earnings, marking the fastest earnings growth since 2021 [1]. The technology sector specifically showed resilience, with 15.7 percent of tech companies receiving fair value increases of at least 10 percent, compared to the broader market where only 7.4 percent of stocks saw increases of that magnitude [1].
Semiconductor Equipment Leaders Surge
Semiconductor capital equipment leaders ASML and Lam Research received the largest upward revisions among major technology firms [1]. ASML’s fair value estimate was raised to $2,050 from $1,400, representing a significant upward adjustment [1]. This change reflects an increase of 46.429 percent in perceived value [1]. Similarly, Lam Research saw its estimate move to $310 from $220, a rise of 40.909 percent [1]. Analysts note that ASML intends to expand Low-NA EUV and DUV immersion capacity by 30 percent in 2027, with the new capacity virtually all booked [1]. Teradyne also saw substantial gains, with sales rising 104 percent year-over-year to $1.33 billion in the second quarter of 2026 [1].
Enterprise Hardware and AI Infrastructure
Networking giant Cisco Systems received a fair value estimate increase of 28 percent to $115.00 per share following its fiscal fourth-quarter earnings report on 12 August 2026 [1]. However, the Uncertainty rating for Cisco was raised from Medium to High due to variability in AI spending [1]. In the analog chip space, Analog Devices reported fiscal third-quarter revenue of $4.02 billion, up 40 percent year over year [2]. Morningstar raised its fair value estimate for Analog Devices to $445 per share from $380, citing optimism about the company’s ability to nearly double its AI data center revenue in fiscal 2027 [2]. Adjusted gross margin for Analog Devices reached 72.5 percent, up 330 basis points year over year [2].
Emerging Players and Future Outlook
Bloom Energy reported second-quarter revenue of $1.065 billion, up 166 percent year on year, with a non-GAAP gross margin of 34.3 percent [1]. Morningstar notes that Bloom is well positioned to meet the power needs of data center customers, though long-term sales trajectory remains highly dependent on this segment [3]. Looking ahead, Nvidia is scheduled to report earnings during the week of 24 August 2026 [1]. Broadcom, Adobe, and Oracle are scheduled to release earnings results in September 2026 [1]. Analysts suggest that artificial intelligence tailwinds are showing up in results across the sector, with organic growth rates accelerating in companies like Twilio, which saw growth reach 17 percent year over year [1].