Qnity Electronics gains 73% YTD as AI demand fuels earnings growth

Qnity Electronics posted Q1 2026 revenue of $1.32 billion, up 18% from a year earlier, as AI semiconductor demand accelerated.

"The results reflect our eighth consecutive quarter of strong, profitable organic growth, driven by accelerating AI and high-performance computing demand," management said during the earnings call.

Adjusted operating EBITDA rose 22% to $411 million, with margin expanding 125 basis points to 31.3%. Semiconductor Technologies organic sales grew 12%, supported by advanced logic and high-bandwidth memory demand. The interconnect solutions segment delivered 22% organic growth, with AI-related product revenue climbing more than 50% year over year.

The stock has gained 72.6% year to date, outperforming the Zacks Computer-Storage Devices industry's 50.3% advance, yet trades at a price-to-sales multiple of 5.28 times, a discount to the industry's 9.33 times. The Zacks Consensus Estimate calls for 24% earnings growth in fiscal 2026.

Qnity is benefiting from the semiconductor industry's shift toward vertically stacked chip architectures, which increases materials intensity across the value chain. The company's CMP consumables, advanced packaging, and thermal management products position it as a key supplier to AI infrastructure buildout.

During the quarter, Qnity opened a 385,000-square-foot manufacturing facility in Delaware and announced a new advanced production site in Taiwan scheduled to begin operations in early 2027. The company also formed a collaboration with Nvidia focused on accelerating materials research for AI and advanced packaging, and was selected for Apple's American Manufacturing Program.

The interconnect solutions segment generated an adjusted EBITDA margin of 28.5%, reflecting operating leverage from higher volumes and favorable product mix. Management highlighted new business wins with AI printed circuit board manufacturers serving hyperscalers and premium smartphone original equipment manufacturers.

Qnity competes with Entegris in semiconductor materials and Amkor Technology in advanced packaging, though both peers also benefit from the same AI-driven demand trends.

The guidance raise signals management expects AI demand to sustain its momentum. Investors will watch the next quarterly report for updated segment margins and capacity utilization at the new Delaware facility.

This article is for informational purposes only and does not constitute investment advice.