What Happened?
A number of stocks jumped in the afternoon session after the broader semiconductor sector recovered from a sharp selloff during the previous trading session.
The decisive tone-setter was Nvidia CEO Jensen Huang, who described the previous week's selloff as a chance to "buy at a discount," adding that the AI revolution is still "at the beginning." That framing, was enough to stabilize sentiment in a sector that had erased $1 trillion in market cap in a single session.
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:
- Semiconductor Manufacturing company Semtech (NASDAQ: SMTC) jumped 5.9%. Is now the time to buy Semtech? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company Lam Research (NASDAQ: LRCX) jumped 8.3%. Is now the time to buy Lam Research? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company Photronics (NASDAQ: PLAB) jumped 5.1%. Is now the time to buy Photronics? Access our full analysis report here, it’s free.
Zooming In On Lam Research (LRCX)
Lam Research’s shares are extremely volatile and have had 32 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 3 days ago when the stock dropped 7.5% as the AVGO earnings overhang and the stronger-than-expected jobs report combined to drive one of the broadest global chip selloff of the year.
The damage spread globally: South Korea's Kospi fell 5.5%, with Samsung down 6.4% and SK Hynix nearly 10%. European names followed: ASML fell 3.8% and Infineon lost more than 6%. The mechanism is two-fold. Broadcom's guidance miss reset expectations for the pace of hyperscaler AI chip spending, removing the sector's most visible growth catalyst. The 172,000-payroll print then eliminated near-term rate cut hopes and introduced rate hike risk by year end per CME FedWatch. Semiconductor valuations, built on aggressive multi-year earnings assumptions, are acutely sensitive to these discount rate movements.
Lam Research is up 77.6% since the beginning of the year, and at $328.70 per share, it is trading close to its 52-week high of $343.71 from June 2026. Investors who bought $1,000 worth of Lam Research’s shares 5 years ago would now be looking at an investment worth $5,156.
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