What Happened?
A number of stocks jumped in the afternoon session after traders positioned ahead of Nvidia's fiscal Q1 earnings.
Nvidia accounted for a significant percentage of the S&P 500's gains heading into the announcement, making the print the binary catalyst for the entire AI-infrastructure complex — networking ASICs, connectivity silicon, memory, and packaging all move together on the read-through.
Falling oil prices also supported the bullish sentiment. Semis carry arguably the longest-dated cash flows in the equity market because most of their value sits in 2027–2030 AI capex, not in the current quarter. When Brent crude drops 5.21% (like it did during the session), expected inflation falls, the Fed gets more room to cut, and the discount rate applied to those distant cash flows compresses. A small rate move produces an outsized stock move, which is why a 5% oil decline can power 8%+ chip rallies on the same day.
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 Photronics (NASDAQ: PLAB) jumped 8.4%. Is now the time to buy Photronics? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company IPG Photonics (NASDAQ: IPGP) jumped 6.4%. Is now the time to buy IPG Photonics? Access our full analysis report here, it’s free.
- Processors and Graphics Chips company AMD (NASDAQ: AMD) jumped 8%. Is now the time to buy AMD? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company KLA Corporation (NASDAQ: KLAC) jumped 4.4%. Is now the time to buy KLA Corporation? Access our full analysis report here, it’s free.
- Analog Semiconductors company MACOM (NASDAQ: MTSI) jumped 4%. Is now the time to buy MACOM? Access our full analysis report here, it’s free.
Zooming In On Photronics (PLAB)
Photronics’s shares are extremely volatile and have had 38 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 1 day ago when the stock dropped 3.8% on the news that a broader selloff hit the semiconductor sector amid valuation concerns and investor nervousness ahead of Nvidia's earnings report. The decline was part of an industry-wide trend where investors retreat from richly valued chip stocks. These stocks were a primary force behind the U.S. market's climb to record highs. Earnings from Nvidia, a key player in the artificial intelligence space, were viewed as a significant test for the AI boom narrative that powered the market. This uncertainty contributed to the negative sentiment across the semiconductor space, leading to a slide in major chipmakers.
Photronics is up 48% since the beginning of the year, but at $49.47 per share, it is still trading 10% below its 52-week high of $54.96 from May 2026. Investors who bought $1,000 worth of Photronics’s shares 5 years ago would now be looking at an investment worth $3,705.
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