Can AI winners sustain blockbuster earnings?

Investors head into second-quarter earnings next week as major U.S. banks and AI-linked semiconductor companies report results. The schedule includes JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and Morgan Stanley, followed by consumer names such as Netflix and key technology suppliers including ASML, Taiwan Semiconductor Manufacturing Company (TSMC) and Micron.

The earliest releases will come from large financial institutions, with semiconductor equipment and foundry results arriving as part of a busy week that market participants expect to affect technology supply-chain forecasts and broader corporate outlooks.

Stock performance in the sector has been marked by large gains this year. ASML reached an all-time high near $2,000 at the end of June, up roughly 172% from a year earlier before retreating in July. TSMC rose about 110% over the same 12-month span and has also pulled back from recent peaks. Micron posted among the largest moves, gaining about 900% year over year and roughly 290% in the prior three months before its peak. The iShares Semiconductor ETF, which holds firms such as Micron, AMD, NVIDIA, Intel and Marvell, is up about 160% over the past 12 months. By comparison, the NASDAQ-100 and the S&P 500 rose about 35% and 22% respectively into their early-June highs.

Many chip-related companies have reported strong quarterly results in recent periods, including larger order backlogs and expanding profit margins, and current consensus forecasts reflect that trend. Market attention for the coming reports will focus on companies’ forward guidance for sales and spending.

Forward-looking commentary will be closely examined. In early June Broadcom’s stock fell about 12% in one session after the company kept its full-year chip revenue target unchanged despite beating earnings and revenue estimates. Micron also experienced a sharp pullback after its rapid run as investors reacted to questions about future memory demand tied to AI applications.

Analysts and investors will review quarterly figures and the specific items companies disclose about future demand. Capital expenditure plans, inventory levels, order backlogs and customer concentration are expected to draw scrutiny. Comments on demand from data centers and cloud providers will be watched for signs about near-term hardware purchases.

ASML and TSMC occupy different roles in chip manufacturing. ASML supplies extreme ultraviolet lithography machines used to make leading-edge chips, while TSMC operates foundries that fabricate chips. Investors and analysts say results from both firms will be parsed for signals about equipment demand, production capacity and longer-term investment plans.

Market participants note expectations are high for many semiconductor names, and both earnings figures and the road maps companies present for the remainder of the year will be examined when the reports are released next week.