Much of the European semiconductor industry may be “circumspect” on the outlook for 2025, but Bernstein sees good entry spots within the sector to play in the year ahead. “While continued strong China demand has driven [wafer fab equipment] to grow an estimated 10% in 2024, our latest outlook expects a flat-ish 2025 and a return to growth (+8%) only in 2026,” the investment bank’s analysts wrote in a Dec. 18 note. WFE is the equipment used to make semiconductor wafers for integrated circuits. Here are two of Bernstein’s top stock picks for the theme. BE Semiconductors BE Semiconductor Industries , which supplies semiconductor assembly equipment, remains Bernstein’s “top pick” in the industry. The investment bank has a target price of 135 euros ($140) on the Dutch stock, giving it around 0.03% upside from its Dec. 24 close. That’s despite the stock’s “tough run” this year in light of delays in the memory adoption of hybrid bonding in March and a lack of recovery in the mainstream assembly business, the bank’s analysts explained. They note that the stock continues to offer a “very attractive fundamental story.” “Patience may be required to see Besi realize strong growth from either or both of cyclical recovery and hybrid bonding—but we remain confident that both will contribute to growth as we look towards 2026 and beyond,” they added. Shares in Besi are listed on the Euronext Amsterdam and also trade in the U.S. as an American Depositary Receipt (ADR) under the ticker BESIY . Infineon Technologies Another stock that Bernstein likes is German chipmaker Infineon , despite its “disappointing” share price for most of 2024. Shares in the Apple supplier are down nearly 16.6% since the start of the year, per FactSet data. “Indicators are now pointing to nearing the trough of the cycle, thus increasing the likelihood of a strong re-rating for IFX. That, combined with the secular growth drivers, of which powering AI datacenters is now a key one for IFX, makes them our top pick among IDMs,” the analysts noted. Infineon now expects its revenue from AI power to surpass 500 million euros in financial year 2025 and subsequently exceed a billion euros within two years, they added. Infineon’s shares are listed on the Frankfurt Stock Exchange and also trade as an ADR in the U.S. under the ticker IFNNY . Bernstein gave the stock a price target of 36 euros, or about 14.1% upside potential compared with its Dec. 24 close, and maintained its outperform rating. — CNBC’s Michael Bloom contributed to this report.
