What Happened?
Shares of semiconductor maker Himax Technologies (NASDAQ: HIMX) jumped 5.5% in the afternoon session after the stock joined a broad rally among semiconductor companies following remarks from Federal Reserve Chair Jerome Powell that sparked hopes for interest rate cuts. The positive sentiment spread across the chip sector after Powell's speech at the Jackson Hole symposium. Further momentum came from the Chinese stock market, where the semiconductor sector was among the leading gainers, with some indices hitting multi-year highs. This market-driven upswing marks a reversal for Himax, which saw its stock drop in pre-market trading the previous day after reporting mixed Q2 2025 earnings results. The current rally appears to be driven by these broader macroeconomic tailwinds rather than recent company-specific performance.
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What Is The Market Telling Us
Himax’s shares are extremely volatile and have had 41 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 biggest move we wrote about over the last year was 6 months ago when the stock gained 14.4% on the news that the company reported strong fourth quarter 2024 results, with revenue rising 6.7% sequentially and 4.2% y/y, exceeding Wall Street's estimates. Operating income rose sharply to 9.7% of sales from 2.6% in the prior quarter, contributing to a solid earnings beat. Looking ahead, the company guided for an 8.5% to 12.5% sequential revenue decline in Q1, citing seasonality from the Lunar New Year holiday. However, revenue is expected to remain flat or grow up to 4.6% y/y, with gross margins holding steady. EPS guidance also implies a substantial y/y increase of 26% to 54%, signaling continued profitability improvements. Overall, this was a decent quarter.
Himax is up 5.5% since the beginning of the year, but at $7.90 per share, it is still trading 38.6% below its 52-week high of $12.85 from January 2025. Investors who bought $1,000 worth of Himax’s shares 5 years ago would now be looking at an investment worth $2,045.
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