What Happened?
A number of stocks fell in the afternoon session after a series of divergent earnings reports highlighted a clear split in the semiconductor industry, with investors rewarding companies exposed to the AI boom while punishing those tied to slowing consumer electronics and manufacturing equipment markets.
The market was clearly distinguishing between winners and losers during the earnings season. Companies with strong exposure to the artificial intelligence boom saw their stocks surge on optimistic forecasts. In contrast, firms exposed to the smartphone market, like Qualcomm and Skyworks Solutions, fell on signs of weakness in consumer electronics. The semiconductor equipment segment, including Lam Research and Applied Materials, also faced headwinds amid concerns of a potential slowdown, following cautious outlooks from industry leaders. This trend highlights a broader investor sentiment that is selective, favoring AI-centric growth stories over more traditional, cyclical parts of the chip market.
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:
- Analog Semiconductors company Skyworks Solutions (NASDAQ: SWKS) fell 3.9%. Is now the time to buy Skyworks Solutions? Access our full analysis report here, it’s free.
- Memory Semiconductors company Micron (NASDAQ: MU) fell 6.4%. Is now the time to buy Micron? Access our full analysis report here, it’s free.
- Analog Semiconductors company Vishay Intertechnology (NYSE: VSH) fell 3.4%. Is now the time to buy Vishay Intertechnology? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company Photronics (NASDAQ: PLAB) fell 4.9%. Is now the time to buy Photronics? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company Kulicke and Soffa (NASDAQ: KLIC) fell 3.7%. Is now the time to buy Kulicke and Soffa? Access our full analysis report here, it’s free.
Zooming In On Micron (MU)
Micron’s shares are very volatile and have had 28 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 15 days ago when the stock dropped 3.2% after a cautious outlook from semiconductor equipment giant ASML sparked a broad sell-off across the sector, hitting chipmakers and equipment suppliers alike. The negative sentiment was triggered after the Dutch firm, whose complex machines are essential for producing advanced chips, warned it could no longer guarantee growth in 2026. ASML's management cited "increasing uncertainty driven by macro-economic and geopolitical developments," including the potential for new U.S. tariffs.
As an industry bellwether, a company whose performance is seen as an indicator of the entire sector's health, ASML's comments are a key signal of future capital spending. The warning sent a chill through the market, as concerns grow that trade tensions could disrupt the highly globalized semiconductor supply chain and slow down investment from chip manufacturers.
Micron is up 23.9% since the beginning of the year, but at $108.21 per share, it is still trading 15.4% below its 52-week high of $127.91 from June 2025. Investors who bought $1,000 worth of Micron’s shares 5 years ago would now be looking at an investment worth $2,162.
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