Market Review

MY: The local bourse advanced, tracking positive global semiconductor sentiment fuelled by surging artificial intelligence demand. Market breadth was positive with 678 gainers outpacing 458 losers. Sector wise, Technology outperformed, led by STRATUS and UNISEM, while Health Care lagged the most.

US: Wall Street delivered a mixed session as tech strength pushed the Nasdaq (+0.5%) to 27,244.3 points, but the Dow (-0.4%) and S&P 500 (-0.0%) ended lower. Meanwhile, Brent crude eased 1.09% to USD100 per barrel, consolidating at the key psychological threshold.

The Day Ahead

US: Wall Street could open mixed as the US 10-year yield approaches 5%, pressuring stock valuations despite relief from Brent crude falling back to USD100/bbl. Against this backdrop, AI remains a key earnings driver and catalyst for near-term momentum. Analog Devices (ADI) stays in focus after record 3QFY26 revenue of USD4.0bn, with 4QFY26 guided to USD4.3bn and its USD1.4bn Alif Semiconductor acquisition adding AI-native capabilities. Flex (FLEX) remains well leveraged to AI infrastructure, while ServiceNow (NOW, TP: USD192.40) offers exposure to AI monetisation, with AI ACV surpassing USD1.0bn in 2Q26. 

MY: Closer to home, we expect the FBM KLCI to trade on a mixed footing, with buying interest likely to remain selective. We continue to favour technology and renewable-energy counters, with VITROX in focus as the SMTA Penang Expo & Tech Forum begins today, where it will showcase AI-driven machine-vision and inspection solutions, following record 2QFY26 revenue of RM374.9m and PAT of RM84.5m. VERDANT (TP: RM0.29) could see further attention on improving earnings visibility, underpinned by its RM63.0m outstanding order book and a 4QFY26 net profit of RM1.5m. Meanwhile, UNISEM remains a key semiconductor recovery play, supported by 20.0% YoY revenue growth in 2QFY26 to RM570.1m and its proposed RM742.0m private placement to fund capacity expansion.