These gold assets are priced for $1,800 gold [it's over $4,000] (From Golden Portfolio)

At a time when semiconductor companies as a group have experienced volatility—the benchmark VanEck Semiconductor ETF (NASDAQ: SMH) is trading down 3% in the last month—names with mounting momentum immediately jump out.

While many investors are taking note of NVIDIA's (NASDAQ: NVDA)early-August rally, fewer are likely to note a smaller firm like SiTime Corp. (NASDAQ: SITM), although the latter has outperformed, up 12% in the last month.

The real catalyst for SiTime was its Q2 2026 earnings, which blew analyst predictions out of the water on multiple fronts. Perhaps even more importantly for investors, SiTime's success in a narrow niche of the semiconductor space may signal that rising AI infrastructure spending could boost multiple enabling technology layers at the same time, putting comparable firms like FormFactor Inc. (NASDAQ: FORM) and Cognex Corp. (NASDAQ: CGNX) in the spotlight as well.

What's Behind SiTime's Big Win

SiTime's non-GAAP earnings per share (EPS) of $2.34 were a full 39 cents over analyst expectations, while revenue climbed by 127% year over year (YOY) to beat predictions by $11 million. The company also achieved excellent margin growth while management gave a solid boost to Q3 guidance on several fronts.

Driving all of these wins were SiTime's strong data center revenue, also linked to other communications applications. However, data center sales growth is not enough to distinguish SiTime from competitors, as many companies in this industry have been fueled by rising demand in that area. The key for SiTime is why it is so essential to data centers, and that is because of its exceptional timing devices. These are increasingly recognized as a dominant alternative to traditional quartz crystal oscillators, giving SiTime an important niche to fill.

What has helped SiTime further capitalize on strong demand is the fact that many different layers of a modern AI cluster will benefit from its synchronization tools. From GPUs and optical interconnects to memory subsystems and networking switches, infrastructure providers are looking for ways to reduce timing errors across the board.

Why a SiTime Win Helps FormFactor

Like SiTime, FormFactor is carving out a space in AI infrastructure not by providing the core chips themselves, but rather by offering enabling technology that helps to distinguish the company as a "pick and shovel." In the case of FormFactor, the tech in question is its test and measurement solutions, making it possible to test the quality of advanced DRAM chips as they exit a fab.

FORM shares are already up an astonishing 132% year to date (YTD), including rising about 11% in the last month. Like SiTime, FormFactor noted excellent Q2 2026 performance, with revenue, non-GAAP EPS, and gross margin all rising.

What helps FormFactor to stand out is that it could easily become an essential tollbooth name for chip providers, making it not a go-to maker of chips themselves but a key stop between production and delivery.

Analysts are betting that this is the case. The stock has received a Moderate Buy rating overall based on six Buys and five Holds, and recently saw both a ratings upgrade from Weiss as well as a very optimistic price target from Evercore.

Cognex Occupies Its Own Lucrative Niche

Like the two firms above, Cognex has also found an important and unique position in the much broader AI ecosystem. In this case, the company's machine vision and inspection technology is proving essential for maintaining manufacturing quality.

One key for Cognex will be accelerating revenue growth to match analysts' lofty expectations. In the latest quarter, for instance, the company boosted revenue by 17% YOY but still fell almost $1 million short of predictions. Still, management has ambitious goals for revenue, adjusted EBITDA margin, adjusted EPS, and other metrics, all of which are on pace to grow rapidly throughout the year.

A benefit that Cognex has over some other firms in the AI infrastructure industry is that it is likely to benefit not only from continued buildout of data centers but also could achieve sales wins as companies refresh their servers over time. Even with near-term headwinds to its margins due to the memory shortage, the company is seeing durable growth. The recent success that SiTime experienced may be a vote of confidence for some investors leery of getting involved indirectly in the AI buildout, as would be the case with a company like Cognex.

Despite already returning 80% this year, analysts see plenty more upside in store for CGNX shares, plus a healthy 12 Buy ratings and only five Holds.

Read this article online ›