The global semiconductor stock market has seen approximately $2.7 trillion in value erased since the Philadelphia Semiconductor Index peaked on June 22.
However, Wall Street institutions still forecast that Micron Technology (MU), NVIDIA (NVDA), and the broader chip industry will collectively generate around $700 billion in profits by 2027.
Despite continuous upward revisions to earnings expectations, the impact of recent share price declines has spread from Micron Technology and NVIDIA to Samsung and SK Hynix, which just listed in the U.S. last Friday.
Micron Technology stands out as the most astonishing example of growth. Bloomberg consensus data shows that this memory chip maker's stock fell over 4% last month, with its net profit for fiscal 2025 projected at just $9 billion. Its earnings are forecast to surge to $83 billion in fiscal 2026 and further reach $176 billion in fiscal 2027.
The core driver behind this explosive profit growth is the sustained, sharp increase in demand for high-end memory chips from artificial intelligence.
High Bandwidth Memory (HBM), paired with computing accelerators like NVIDIA GPUs, enables high-speed data transfer and ensures processors operate at full capacity. The current tight supply of memory chips, combined with multi-year customer contracts, has led Micron Technology's performance to significantly exceed expectations this cycle, directly prompting the market to substantially raise its full-cycle profit forecasts.
NVIDIA contributes the largest share of industry profits. The market predicts its net profit for calendar year 2027 will be approximately $316 billion. Converting Micron Technology's profit forecast to a calendar year basis yields an expectation nearing $189 billion. These two companies together account for 72% of the industry's total anticipated profits. Adding Broadcom (AVGO) would increase the combined share of the top three to about 85%.
Even excluding these three leaders, the industry's overall profit growth remains substantial.
The S&P 1500 Semiconductors & Equipment sector is forecast to see its annual net profit more than triple by 2027. Excluding NVIDIA, Micron Technology, and Broadcom, the combined net profit of the remaining chip companies is expected to double from about $46 billion in 2025 to approximately $105 billion in 2027.
This trend reflects a continued shift of capital from large cloud providers to chip companies: major tech firms are persistently increasing investment in computing infrastructure, while memory manufacturers, semiconductor equipment suppliers, and chip design companies are capturing an expanding share of the profits.
These profit forecasts are based on three key premises: sustained high levels of AI capital expenditure, firm memory chip prices, and a measured pace of new capacity coming online to avoid another glut.
J.P. Morgan noted in a recent client research report that the tight supply situation is expected to persist, with no large-scale new capacity additions likely before early 2028.
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