What Happened?
A number of stocks fell in the afternoon session after federal prosecutors charged a Super Micro Computer co-founder with conspiring to smuggle billions of dollars in AI chips to China.
The news of federal export control violations triggered a sharp selloff, with Super Micro's shares cratering over 28%. The charges created broader anxiety across the AI semiconductor industry, contributing to declines in other major chip stocks like AMD. This development exacerbated a wider downturn in the tech-heavy Nasdaq, as investors reacted to the serious allegations and the potential for stricter regulations on advanced technology exports.
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 FormFactor (NASDAQ: FORM) fell 4.2%. Is now the time to buy FormFactor? Access our full analysis report here, it’s free.
- Memory Semiconductors company Western Digital (NASDAQ: WDC) fell 5.2%. Is now the time to buy Western Digital? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company IPG Photonics (NASDAQ: IPGP) fell 4.5%. Is now the time to buy IPG Photonics? Access our full analysis report here, it’s free.
- Analog Semiconductors company Vishay Intertechnology (NYSE: VSH) fell 5%. Is now the time to buy Vishay Intertechnology? Access our full analysis report here, it’s free.
Zooming In On Western Digital (WDC)
Western Digital’s shares are extremely volatile and have had 45 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 4 days ago when the stock gained 4.9% on the news that investor enthusiasm for the artificial intelligence hardware boom, fueled by key company announcements and anticipation for Nvidia's GTC 2026 conference.
The sector experienced a significant uplift as the industry pivoted toward hardware-led innovation. Analysts at Frost & Sullivan have also highlighted that 2026 is expected to feature a shift towards hardware, with next-generation semiconductors enabling faster and more efficient AI processing.
Western Digital is up 59.5% since the beginning of the year, and at $299.44 per share, it is trading close to its 52-week high of $316.93 from March 2026. Investors who bought $1,000 worth of Western Digital’s shares 5 years ago would now be looking at an investment worth $4,258.
ALSO WORTH WATCHING: Nvidia’s Quiet Partner. Nvidia’s chips cost a hundred grand. The connectors that make them work cost even more. One company makes them all.
Every AI server needs specialized infrastructure the chip companies don’t make. High-speed cables. Power connectors. Thermal sensors. This 90-year-old company built a monopoly on it. The AI boom just started. This stock is still flying under the radar. Claim The Stock Ticker Here for FREE.
