Idex stock remains Mizuho’s top pick on AI chip growth outlook

Mizuho continues to favor Idex as its top semiconductor stock amid robust AI chip growth prospects. TSMC's latest third-quarter 2026 results surpassed expectations, with guidance predicting a continued rise in fourth-quarter spending. The company raised its fiscal 2026 revenue growth forecast to about 44% in U.S. dollars. AI demand is outpacing supply, enabling TSMC to expand capacity beyond 2026.

The company anticipates capital expenditure for fiscal 2026 to range from $60 billion to $64 billion, with spending in the upcoming years significantly surpassing the previous three years.

Mizuho's assessment of semiconductor equipment and infrastructure investments is bolstered by sustained AI demand, rapid advancements in leading-edge capacity, and an expanding global fab footprint. Primary beneficiaries of this growth trajectory include Idex (NYSE:IEX), Parker-Hannifin (NYSE:PH), and Ametek (NYSE:AME), along with a broader impact on electrical, cooling, and other fab infrastructure companies.

Parker-Hannifin, boasting a market cap of $119.7 billion, delivered a 31% return over the past year and has maintained its dividend for 56 consecutive years.

Despite analysts flagging Parker-Hannifin's stock as potentially overvalued, Truist maintains a Buy rating, emphasizing the company's dominance in multiple industries and strategic acquisitions like the $9.25 billion purchase of Filtration Group Corporation. TD Cowen raised its price target for Parker-Hannifin to $950, retaining a Hold rating, while Stifel kept a Hold rating with a price target of $1,075, citing a possible link between the stock's performance and the global purchasing managers' index (PMI).