What Happened?
Shares of semiconductor testing company FormFactor (NASDAQ: FORM) fell 4.9% in the afternoon session after the semiconductor sector sold off after peer Texas Instruments provided a cautious forecast. Texas Instruments reported earnings with a slight miss on profit and warned of a slower-than-expected future. The news sent its shares down over 5% and dampened spirits across the semiconductor industry, which fell as a group. This negative sentiment surrounding a major player in the chip space appeared to weigh on FormFactor's stock as well, contributing to its decline.
The shares closed the day at $41.28, down 5.2% from previous close.
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 FormFactor? Access our full analysis report here.
What Is The Market Telling Us
FormFactor’s shares are extremely volatile and have had 31 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 gained 2.7% on the news that the company's stock rose along with others in the semiconductor sector after industry giant ASML Holding reported better-than-expected orders for the third quarter. ASML, a major chip-making equipment manufacturer, posted orders of 5.40 billion euros, a large increase from 2.63 billion euros a year earlier. This surge was fueled by strong demand for sophisticated semiconductors used to power artificial intelligence. The strong performance from an industry leader like ASML created positive sentiment for the entire sector, suggesting a healthy demand environment that could also benefit other equipment makers. The positive outlook for the sector was further supported by a forecast for significant growth in the global semiconductor equipment parts market.
FormFactor is down 6.6% since the beginning of the year, and at $41.29 per share, it is trading 13.6% below its 52-week high of $47.80 from December 2024. Investors who bought $1,000 worth of FormFactor’s shares 5 years ago would now be looking at an investment worth $1,394.
Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.
