AI Chip Underdogs Veeco and Axcelis: The Overlooked Trade as Hype Rotates Out of Mega-Caps

If you’re scanning the tape for the next AI trade and your eyes glaze over at the usual suspects, you’re not alone. The mega-cap tech parade has gotten so crowded that even the algos are tripping over each other for a slice of the same pie. But while the world obsesses over Nvidia’s every tick, a quieter, more interesting story is playing out in the semiconductor-equipment underbelly, specifically with Veeco and Axcelis.

The market’s recent obsession with AI infrastructure has created a gravitational pull so strong that even the most seasoned traders have started to question whether there’s any juice left in the trade. The answer, at least for the big names, is probably not at these multiples. But the real story is what’s happening in the second and third tier of the supply chain, where Veeco and Axcelis operate. Shares of both have lagged their larger peers, and the market is only just waking up to the fact that the AI arms race is as much about who sells the picks and shovels as who finds the gold.

According to MarketWatch, Veeco and Axcelis have underperformed the likes of ASML and Lam Research, despite posting solid revenue growth and margin expansion. The numbers are telling: Veeco is trading at a forward P/E of just 13, and Axcelis at 15, compared to Lam’s 23 and ASML’s 30. This isn’t just a value trap, there’s a structural rotation underway as buy-side desks look for lower-beta ways to play the AI buildout without paying nosebleed multiples.

The context here is crucial. The first quarter of 2026 was a masterclass in narrative whiplash: AI euphoria, SaaS compression, and then a sharp pivot to macro risk as the Hormuz crisis and stagflation fears took center stage. The result? Growth bulls got chopped up, and the risk-on crowd is now hiding in anything with a whiff of secular tailwind that isn’t already priced for perfection.

Veeco and Axcelis are the poster children for this rotation. Both companies are levered to the next wave of AI datacenter buildouts, but they’re also exposed to the broader semiconductor capex cycle, which is only just starting to recover from last year’s inventory glut. The Street is finally catching on: consensus estimates for both have been revised up in the past month, and options flow has turned decidedly bullish, with call volume outpacing puts by 2.5 to 1 in the last week.

But let’s not pretend this is a risk-free setup. The entire sector is still hostage to macro shocks, especially with the ISM Services PMI and US jobs data looming next week. And while Veeco and Axcelis are less exposed to China than some of their peers, any escalation in the Hormuz crisis could still ripple through the supply chain, especially if logistics or raw material costs spike.

Strykr Watch

Technically, both Veeco and Axcelis are sitting just above their 50-day moving averages, with Veeco at $29.09 and Axcelis at $129.89. The RSI for both is in the mid-50s, suggesting neither is overbought nor oversold. The real tell will be whether they can break above recent resistance, $30.50 for Veeco and $132 for Axcelis. If they do, there’s room to run to $34 and $140, respectively. On the downside, watch $27.50 for Veeco and $125 for Axcelis. A break below those levels and the rotation thesis starts to look shaky.

The options market is pricing in a move of about 8% for both stocks over the next month, which is elevated but not extreme. Implied volatility has ticked up, but realized vol remains subdued, suggesting traders are positioning for a breakout but aren’t yet panicking about a breakdown.

Risks abound. A hawkish surprise from the Fed, a sudden reversal in AI sentiment, or a macro shock out of the Middle East could all derail the trade. But the reward-to-risk here is better than what you’ll find chasing Nvidia at 40x forward earnings.

On the opportunity side, this is a classic mean-reversion setup with a structural tailwind. Longs can look to enter on dips to the 50-day, with stops just below recent support. Upside targets are 10-15% higher if the rotation continues and the macro tape doesn’t implode.

Strykr Take

The bottom line: The AI trade isn’t dead, but it’s evolving. If you’re still chasing the top of the funnel, you’re late. The smart money is already rotating into the picks-and-shovels names that have been left behind. Veeco and Axcelis aren’t sexy, but they’re exactly where you want to be as the next phase of the AI buildout gets underway. Strykr Pulse 69/100. Threat Level 2/5. This is a trade for grown-ups who know how to manage risk and aren’t afraid of a little volatility.