What Happened?
A number of stocks jumped in the afternoon session after risk-on sentiment returned on Iran peace progress as Treasury yields cooled.
Analog chips (Texas Instruments, Analog Devices, NXP, ON Semi, Microchip) are the workhorse semiconductors inside cars, industrial machinery, medical devices, and consumer electronics.
They're tied to broad industrial and auto production, both of which rallied during the day. Analog chip companies have been working through a two-year inventory correction, where customers like auto OEMs and industrial equipment makers over-ordered during the pandemic and have been drawing down ever since.
When the economic outlook improves: Dow at 50,700, yields cooling, peace progress on the table, customers shift from drawing down inventory to placing fresh orders. That's the moment the cycle turns.
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 Universal Display (NASDAQ: OLED) jumped 3.4%. Is now the time to buy Universal Display? Access our full analysis report here, it’s free.
- Analog Semiconductors company Microchip Technology (NASDAQ: MCHP) jumped 3.9%. Is now the time to buy Microchip Technology? Access our full analysis report here, it’s free.
Zooming In On Microchip Technology (MCHP)
Microchip Technology’s shares are quite volatile and have had 15 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 7 days ago when the stock dropped 2.6% after the U.S.-China summit concluded without any significant breakthroughs on semiconductor sales to the country.
Expectations had been building for a potential deal, particularly regarding Washington's authorization for Nvidia to export its H200 chips to China. However, the summit ended without a formal approval for the shipments from Beijing. This lack of progress disappointed investors who had hoped for a resolution. Adding to the negative sentiment, U.S. Trade Representative Jamieson Greer stated in an interview that semiconductors were not a primary focus during the talks between President Trump and Chinese leader Xi Jinping, dashing hopes for a near-term catalyst for the sector.
Microchip Technology is up 45.2% since the beginning of the year, and at $94.44 per share, it is trading close to its 52-week high of $102.92 from May 2026. Investors who bought $1,000 worth of Microchip Technology’s shares 5 years ago would now be looking at an investment worth $1,226.
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