What Happened?
A number of stocks jumped in the afternoon session after the semiconductor sector rallied as a bullish revenue forecast from memory-chip maker Micron Technology helped reignite investor enthusiasm for the AI-driven market.
Shares of Micron soared over 11% after the company issued a sales outlook that surpassed analysts' estimates, pointing to robust demand for its chips, which are crucial for AI hardware. As a bellwether for the industry, Micron's optimistic outlook is seen as a positive signal for the entire semiconductor ecosystem. Management cited improving demand conditions and tighter supply, suggesting strong pricing power. This news helped reverse recent slides in AI-related stocks and lifted the broader semiconductor sector, reinforcing the narrative of sustained growth fueled by the expansion of artificial intelligence.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Memory Semiconductors company Seagate Technology (NASDAQ:STX) jumped 5.6%. Is now the time to buy Seagate Technology? Access our full analysis report here, it’s free for active Edge members.
- Analog Semiconductors company onsemi (NASDAQ:ON) jumped 2.8%. Is now the time to buy onsemi? Access our full analysis report here, it’s free for active Edge members.
- Semiconductor Manufacturing company Semtech (NASDAQ:SMTC) jumped 6.2%. Is now the time to buy Semtech? Access our full analysis report here, it’s free for active Edge members.
- Semiconductor Manufacturing company Nova (NASDAQ:NVMI) jumped 5.6%. Is now the time to buy Nova? Access our full analysis report here, it’s free for active Edge members.
- Semiconductor Manufacturing company Teradyne (NASDAQ:TER) jumped 3.1%. Is now the time to buy Teradyne? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Semtech (SMTC)
Semtech’s shares are extremely volatile and have had 50 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock dropped 7% on the news that investors grew concerned over the profitability timeline of artificial intelligence (AI) investments following financial reports from industry giants.
Fears of an AI bubble resurfaced after Oracle reported higher-than-expected capital spending alongside lower revenue and operating income. The news sent Oracle's shares plummeting and created a ripple effect across the AI landscape, dragging down chipmakers like Nvidia and Micron Technology. The negative sentiment was so pervasive that even Broadcom, which posted better-than-expected results, saw its stock decline. The market reaction signals investor anxiety about when the massive capital expenditures on AI infrastructure will translate into tangible profits, leading to a broader rotation out of big tech names.
Semtech is up 15.6% since the beginning of the year, but at $71.76 per share, it is still trading 10.9% below its 52-week high of $80.54 from December 2025. Investors who bought $1,000 worth of Semtech’s shares 5 years ago would now be looking at an investment worth $1,001.
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