FORM

The semiconductor industry is experiencing strong growth driven by AI demand expanding beyond model training into inference and physical AI, requiring advanced chips across logic, DRAM, NAND, and HBM. Applied Materials, Lam Research, and FormFactor are well-positioned to benefit from increased hyperscaler spending on AI-supportive chips and advanced packaging. However, the industry faces headwinds from supply chain constraints, rising manufacturing costs, and potential tariffs.

Zacks Investment Research identifies five growth stocks with Zacks Rank #1 (Strong Buy) ratings expected to perform well in Q4 2026, supported by softer inflation, lower bond yields, and reduced crude oil prices. The picks include Quanta Services (infrastructure/AI data centers), FormFactor (semiconductor testing), Semtech (data center networking), Centene (healthcare services), and Roku (streaming advertising), all showing strong revenue and earnings growth projections.