What Happened?

A number of stocks fell in the afternoon session after the semiconductor sector tumbled as a 'buy the rumor, sell the news' event unfolded around AI-chip leader Nvidia, despite its strong earnings report. 

Even though Nvidia reported better-than-expected fiscal fourth-quarter results and provided upbeat guidance, its shares fell, dragging the broader market with it. The sell-off triggered a plunge in the Philadelphia Semiconductor Index and pulled down peers like Broadcom, Micron, and AMD. Analysts suggest the focus for investors has shifted from Nvidia's stellar performance to broader concerns, including growing competition in the artificial intelligence sector and whether the high levels of investment in the AI space are sustainable. This negative reaction highlights a cautious sentiment, where even positive news couldn't sustain the sector's upward momentum.

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) fell 4.8%. Is now the time to buy Monolithic Power Systems? Access our full analysis report here, it’s free.
• Semiconductor Manufacturing company Photronics (NASDAQ: PLAB) fell 12%. Is now the time to buy Photronics? Access our full analysis report here, it’s free.

Zooming In On Photronics (PLAB)

Photronics’s shares are very volatile and have had 28 moves greater than 5% over the last year. But moves this big are rare even for Photronics and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 1 day ago when the stock gained 13.9% on the news that the company reported fourth-quarter 2025 results that beat Wall Street's expectations for both revenue and earnings. 

Revenue grew 6.1% year on year to $225.1 million, exceeding analyst forecasts. The company's profitability was also a bright spot, with adjusted earnings per share of $0.61, comfortably surpassing the consensus estimate of $0.53. Looking ahead, while Photronics's revenue guidance for the next quarter was in line with estimates, its earnings forecast was slightly better than anticipated. The solid performance, characterized by beats on both the top and bottom lines coupled with a decent outlook, appeared to boost investor confidence.

Photronics is up 15.8% since the beginning of the year, but at $38.68 per share, it is still trading 11.2% below its 52-week high of $43.57 from February 2026. Investors who bought $1,000 worth of Photronics’s shares 5 years ago would now be looking at an investment worth $3,247.

While Wall Street chases Nvidia at all-time highs, an under-the-radar semiconductor supplier is dominating a critical AI component these giants can’t build without. Click here to access our full research report, it’s free.