What Happened?
A number of stocks fell in the afternoon session after new trade tensions and disappointing earnings from major tech companies weighed heavily on investor sentiment.
A key driver was the news that the White House is considering new restrictions on Chinese exports that use U.S. software, a move that could significantly impact technology companies. This uncertainty over escalating trade tensions created a broad sense of worry in the market. Simultaneously, shares of the semiconductor giant Texas Instruments dropped 6% after its latest earnings and future revenue forecast both came in weaker than expected, which is a big concern for the health of the tech industry. This poor performance from Texas Instruments immediately dragged down the entire semiconductor sector, causing other major chipmakers like Advanced Micro Devices and Micron Technology to also see significant declines.
Compounding the bad news, streaming service Netflix saw its stock slump 9% after it missed its earnings targets, partly blaming a tax dispute in Brazil. The combined effect of renewed trade war fears and the direct evidence of underperformance from influential companies in the technology sector was enough to push the major market indexes lower.
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:
- Electronic Components & Manufacturing company Coherent (NYSE: COHR) fell 5.8%. Is now the time to buy Coherent? Access our full analysis report here, it’s free for active Edge members.
- Terrestrial Telecommunication Services company Lumen (NYSE: LUMN) fell 3.9%. Is now the time to buy Lumen? Access our full analysis report here, it’s free for active Edge members.
- Hardware & Infrastructure company Pure Storage (NYSE: PSTG) fell 4.2%. Is now the time to buy Pure Storage? Access our full analysis report here, it’s free for active Edge members.
- Industrial & Environmental Services company CECO Environmental (NASDAQ: CECO) fell 3%. Is now the time to buy CECO Environmental? Access our full analysis report here, it’s free for active Edge members.
- Government & Technical Consulting company Jacobs Solutions (NYSE: J) fell 4.1%. Is now the time to buy Jacobs Solutions? Access our full analysis report here, it’s free for active Edge members.
Zooming In On Coherent (COHR)
Coherent’s shares are extremely volatile and have had 43 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 2 days ago when the stock gained 5.7% on the news that Barclays raised its price target on the stock, fueling investor confidence.
The firm's analyst, Tom O'Malley, increased the price target from $110.00 to $135.00, representing a significant jump, while keeping an "Overweight" rating on the shares. This positive revision was linked to Coherent's role in the growing semiconductor and artificial intelligence fields. Analysts pointed to the company's strong innovations as a key reason for their positive outlook. The move by Barclays followed another price target increase a few days earlier from a Rosenblatt analyst, who lifted their target from $135.00 to $150.00 and maintained a "Buy" rating.
Coherent is up 13.7% since the beginning of the year, and at $114.41 per share, it is trading close to its 52-week high of $122.35 from October 2025. Investors who bought $1,000 worth of Coherent’s shares 5 years ago would now be looking at an investment worth $2,396.
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