What Happened?
A number of stocks fell in the afternoon session after negative news from a data center company and a significant sale of Nvidia shares by a major investor fueled a broader sell-off.
The downturn in chip stocks followed an announcement from CoreWeave Inc that a data center delay would negatively affect its financial expectations, leading to a downgrade by JPMorgan Chase. This news created concern across the industry, weighing on other chipmakers including ARM Holdings, Micron Technology, and Lam Research. Further pressure came as the technology-heavy Nasdaq Composite index fell, with companies like Nvidia dropping after reports that SoftBank had sold its stake.
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 Marvell Technology (NASDAQ: MRVL) fell 4%. Is now the time to buy Marvell Technology? Access our full analysis report here, it’s free for active Edge members.
- Analog Semiconductors company Himax (NASDAQ: HIMX) fell 3%. Is now the time to buy Himax? Access our full analysis report here, it’s free for active Edge members.
- Semiconductor Manufacturing company Teradyne (NASDAQ: TER) fell 4.3%. Is now the time to buy Teradyne? Access our full analysis report here, it’s free for active Edge members.
- Processors and Graphics Chips company Penguin Solutions (NASDAQ: PENG) fell 5.1%. Is now the time to buy Penguin Solutions? Access our full analysis report here, it’s free for active Edge members.
- Analog Semiconductors company Vishay Intertechnology (NYSE: VSH) fell 3.3%. Is now the time to buy Vishay Intertechnology? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Penguin Solutions (PENG)
Penguin Solutions’s shares are very volatile and have had 22 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 29 days ago when the stock gained 5.7% on the news that investor fears eased as President Trump softened his tone regarding trade relations with China.
Following a sharp selloff late last week fueled by threats of an additional 100% tariff on Chinese goods, the president's more conciliatory weekend message that "it will all be fine" sparked a broad market rally. The semiconductor sector, which is particularly sensitive to international trade policies due to its global supply chains, was among the biggest beneficiaries of the improved sentiment. Chipmakers had posted significant declines during the previous week amid escalating tariff concerns. The reversal in tone helped these stocks recover a substantial portion of their recent losses as investors bought back into the sector, relieved that trade tensions might not escalate further.
Penguin Solutions is up 9% since the beginning of the year, but at $21.06 per share, it is still trading 28.1% below its 52-week high of $29.30 from October 2025. Investors who bought $1,000 worth of Penguin Solutions’s shares 5 years ago would now be looking at an investment worth $1,406.
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.
