Call us believers in the Qnity Electronics story. We’re instituting a buy-equivalent 1 rating and price target of $110 a share on the newly public DuPont spin-off — betting there’s plenty of upside ahead thanks to Qnity’s exposure to secular trends such as artificial intelligence and high-performance computing. Qnity is a key supplier of chemicals and materials used in semiconductor and electronics manufacturing. The more chips and electronic devices that get built, the more demand there is for Qnity’s products. Executives made that clear once again Thursday night when they hosted, essentially, an earnings call “lite.” With DuPont reporting third-quarter results before the opening bell Thursday, investors had already seen Qnity’s numbers for the July-to-September period. The call on Thursday evening gave Qnity management an opportunity to provide additional insight into the results and offer their own outlook for the separated company, which on Monday began normal trading on the New York Stock Exchange and joined the S & P 500. The stock saw consecutive days of strong gains to start the week, but as the broader AI trade got hit with a wave of selling, Qnity shares also pulled back. The biggest highlight on Thursday night: Qnity raised its full-year 2025 sales outlook to $4.7 billion, up by a $100 million from the forecast provided at its September investor day. That’s a pretty good start to its life as a standalone firm. Meanwhile, management backed its full-year adjusted EBITDA guidance of $1.4 billion on a roughly 30% margin. Short for earnings before interest, taxes, depreciation and amortization, EBITDA is a measure of operating profitability. One thing to keep in mind, Qnity’s $1.4 billion target is on a “pro-forma basis,” meaning it’s modified to show what Qnity’s adjusted EBITDA would look like if it had been a standalone company all year. This is standard practice in spin-offs, giving investors a financial starting point for their evaluation. The profit metrics discussed below also are on a pro-forma basis. Third-quarter results In the three months ended in September, Qnity’s sales increased 11% year over year — or 10% organically, backing out currency fluctuations — to $1.3 billion. Adjusted operated EBITDA came in at $370 million, up 6% from the year-ago period, translating to a roughly 29% margin. Adjusted net income rose about 16% year over year. It should be noted that reported results and guidance are impacted by about $40 million in sales being pulled into the third quarter as customers sought to get orders in ahead of spin. Adjusting for this pull-forward, third-quarter organic sales would have been closer to 7%, while the guide for the fourth quarter would have been a bit stronger. “We’ve delivered six consecutive quarters of sustained, strong organic growth,” CEO Jon Kemp said Thursday night. “We’re continuing to build momentum and invest in the fastest growing, highest margin areas with a robust innovation pipeline, a true competitive advantage and we’re making meaningful progress shaping a culture that keeps us focused on what truly matters; our customers, innovation, speed, and our people, empowering us to deliver with purpose and agility at a pace our customers require.” Digging a bit deeper, Qnity reports results in two segments: Semiconductor Technologies and Interconnect Solutions. The Semiconductor Technologies segment is home to its products used directly in the complex process of fabricating an integrated circuit — for example, leading foundries TSMC and Samsung are customers — as well as the materials that go into certain TV screens and other electronic displays. LG, the Korean electronics giant, is another Qnity customer. As for the Interconnect Solutions unit, it supplies materials used in advanced packaging for chips, an increasingly important step in the manufacturing process of AI processors. It also is home to thermal management chemicals, which also benefit from the AI boom because the performance capabilities of AI chips generate a lot of heat. It may seem like there is a lot of similarities between the two segments, and that is because, well, they are closely related. Seven of Qnity’s top 10 customers rely on solutions from both of its business segments, Kemp has said. For the third quarter, Semiconductor Technologies saw roughly 8% sales growth on the back of a 9% increase volume — a sign of increased demand, rather than relying on price hikes to drive the topline. The pickup in volume was “driven by content gains in advanced node transitions and improved customer utilization rates,” CFO Matthew Harbaugh said on the call. Interconnect Solutions, meanwhile, realized about 15% year over year sales growth on the back of a 15% increase in volume, “led by strength from AI-driven technology ramps,” Harbaugh noted. The finance chief also said the segment benefited from growth in industrial end markets such as aerospace, defense and automotive. Q ALL mountain Qnity’s stock performance. Commentary As mentioned, the call on Thursday night was a great opportunity to hear from Kemp and Harbaugh as they establish their relationship with the investment community. Kemp was previously the president of DuPont’s Electronics and Industrial segment. Harbaugh, who joined the team in May , was an external hire with experience around spin-offs. On the call, Kemp provided some thoughts on the trends driving the business. “The semiconductor market recovery continues to be fueled by the adoption of leading-edge technologies for AI applications, including advanced logic, high-bandwidth memory, advanced packaging and thermal solutions.” He also noted that customer utilization rates appear to have improved slightly on a sequential basis. For his part, Harbaugh noted that one of Qnity’s strengths, particularly in its Interconnect Solutions segment, is its exposure to the fastest-growing parts of the semiconductor industry. As the recent earnings report from old-school chipmaker Texas Instruments showed, the AI chip market is much hotter than analog chips. The disparate performance across fellow Club name Broadcom’s segments also illustrates this dynamic. “While the broader semiconductor market is still recovering, we saw accelerated growth across several parts of our Interconnect segment, highlighting the strength of our portfolio diversification across the entirety of the semi and advanced electronics value chain,” Harbaugh said. “As we look ahead, our fundamentals remain strong.” Another reason to like Qnity’s prospects is its global footprint, given the global trade tensions we’ve been facing. Kemp called Qnity’s local-for-local approach a “key strategic advantage underlying our performance.” “Our manufacturing and R & D facilities are located close to customers enhancing customer intimacy, strengthening supply chain resiliency, and increasing agility to ensure consistent, stable supply,” he said. “With this footprint and local engagement model, we offer the best of both worlds, close customer collaboration backed by capabilities at scale.” (Jim Cramer’s Charitable Trust is long Q, AVGO. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. 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