What Happened?
Shares of semiconductor materials supplier Entegris (NASDAQ: ENTG) fell 3% 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. Is now the time to buy Entegris? Access our full analysis report here.
What Is The Market Telling Us
Entegris’s shares are extremely volatile and have had 33 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 2.8% on the news that investors reassessed stretched valuations following a period of strong gains, sparking a broad sell-off.
The tech-heavy Nasdaq fell as much as 1.6%, with the S&P 500 also declining. The pullback was exemplified by AI firm Palantir Technologies, which dropped over 7% despite reporting better-than-expected sales. This negative reaction to positive news suggests investors are concerned about extreme valuations and are engaging in "long liquidation"—selling positions to lock in profits after a significant rally. Adding serious weight to this caution, leadership at both Goldman Sachs and Morgan Stanley highlighted the possibility of a correction in the equity markets over the next couple of years. Despite the euphoria driven by AI optimism and the promise of future rate cuts, these banks viewed this cooling-off period not as a disaster, but as a necessary and healthy feature of a long-term bull market.
Entegris is down 13.9% since the beginning of the year, and at $83.69 per share, it is trading 24.3% below its 52-week high of $110.51 from December 2024. Investors who bought $1,000 worth of Entegris’s shares 5 years ago would now be looking at an investment worth $955.37.
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