What Happened?
A number of stocks fell in the afternoon session after markets continued to retreat, as investors re-evaluated the high valuations of stocks that benefited from the artificial intelligence boom.
After a fantastic run, many of those high-flying AI and technology stocks saw investors take profits: selling shares to lock in their gains. This is often called a "market rotation." Money is moving out of the red-hot tech sector (which some worry has become too expensive) and into other parts of the market that investors may currently deem more stable or reasonably-priced.
There's a secondary reason for the cautious mood: The long government shutdown came to an end. Though it's typically interpreted as good news, it also means a flood of delayed economic reports will be released. For weeks, investors were "flying blind" without key updates on the economy's health, like inflation data and the jobs report. In typical "sell the news" fashion, investors may also be taking profits and selling in anticipation that the new data would potentially give the Federal Reserve reasons to slow or even pause future rate cuts.
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:
- Processors and Graphics Chips company AMD (NASDAQ: AMD) fell 3.2%. Is now the time to buy AMD? Access our full analysis report here, it’s free for active Edge members.
- Semiconductor Manufacturing company Marvell Technology (NASDAQ: MRVL) fell 2.6%. Is now the time to buy Marvell Technology? Access our full analysis report here, it’s free for active Edge members.
- Analog Semiconductors company Impinj (NASDAQ: PI) fell 3.9%. Is now the time to buy Impinj? Access our full analysis report here, it’s free for active Edge members.
- Semiconductor Manufacturing company Applied Materials (NASDAQ: AMAT) fell 3.2%. Is now the time to buy Applied Materials? Access our full analysis report here, it’s free for active Edge members.
- Semiconductor Manufacturing company KLA Corporation (NASDAQ: KLAC) fell 3%. Is now the time to buy KLA Corporation? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Impinj (PI)
Impinj’s shares are extremely volatile and have had 34 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 6 days ago when the stock dropped 8.3% on the news that UBS initiated coverage on the stock with a Neutral rating and a $200 price target, citing concerns about near-term growth challenges. The investment firm expressed caution about the company's outlook through 2026. This view was based on several factors, including uncertainty in the retail sector stemming from tariffs and inflation. Additionally, UBS pointed to less momentum from established programs and unpredictable deployment schedules at major retailers like Walmart and Kroger. The new coverage set a baseline for the stock's expected performance, and the cautious tone appeared to weigh on investor sentiment.
Impinj is flat since the beginning of the year, and at $145.65 per share, it is trading 39.8% below its 52-week high of $241.91 from October 2025. Investors who bought $1,000 worth of Impinj’s shares 5 years ago would now be looking at an investment worth $4,241.
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