What Happened?
A number of stocks jumped in the afternoon session after the Trump administration announced a new peace deal that would lead to the reopening of the Strait of Hormuz, signaling a potential recovery in the industrial and automotive end markets that analog chips are most directly tied to.
Unlike digital processors and AI chips, analog semiconductors convert real-world signals — temperature, pressure, speed, current — into data. Their customers are automakers, industrial equipment manufacturers, energy infrastructure operators, and factory automation providers. All of these end markets had slowed as supply chains stalled and capital spending was deferred after the Hormuz blockade began. With the strait preparing to reopen and global industrial activity expected to recover, the order pipeline for analog makers begins to rebuild.
The 10-year yield falling to its lowest level since mid-May added a macro re-rating on top of the underlying demand recovery as a cheaper rate environment makes the industrial capital expenditure that drives analog demand more financially viable.
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 Monolithic Power Systems (NASDAQ: MPWR) jumped 4%. Is now the time to buy Monolithic Power Systems? Access our full analysis report here, it’s free.
- Analog Semiconductors company Sensata Technologies (NYSE: ST) jumped 2.6%. Is now the time to buy Sensata Technologies? Access our full analysis report here, it’s free.
Zooming In On Monolithic Power Systems (MPWR)
Monolithic Power Systems’s shares are very volatile and have had 25 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 3% as the midday Apache helicopter incident over the Strait of Hormuz removed the stable macro backdrop the semiconductor sector needed to extend its recovery.
US Central Command confirmed an American Apache helicopter had gone down near the coast of Oman, and President Trump said the US "must respond" to what he described as an Iranian attack over the Strait of Hormuz.
Chips are acutely sensitive to the inflation and rate environment and any development that re-accelerates oil prices keeps the 10-year yield elevated and compresses the high multiples the sector carries. The 10-year was already at 4.53%, and rate-hike probability for year-end already exceeded 50% before this headline. The underlying concerns from the previous week's rout including Broadcom's cautious AI guidance, a memory chip glut, and the May jobs report pushing yields higher, hadn't resolved. The helicopter incident renewed geopolitical uncertainty just as the bounce was consolidating, pulling the sector back before the CPI reading later in the week.
Monolithic Power Systems is up 76.3% since the beginning of the year, and at $1,651 per share, it is trading close to its 52-week high of $1,690 from June 2026. Investors who bought $1,000 worth of Monolithic Power Systems’s shares 5 years ago would now be looking at an investment worth $4,779.
ONE MORE THING: 3 Hidden Platforms Growing 3X Faster than Amazon, Google, and PayPal. Amazon, Google, and Meta all followed the same playbook: Dominate an ignored market. Build an unbeatable moat. Scale until you’re unstoppable.
These three platforms are running that exact playbook right now. The early investors in Amazon made fortunes. The early investors in these could do the same. Get All 3 Stocks Here for FREE.
