What Happened?

A number of stocks fell in the afternoon session after reports revealed tech giant Oracle is generating lower-than-expected margins in its cloud business and losing money on Nvidia chip rentals. The news caused Oracle's shares to tumble over 5% and sparked a wider tech sell-off, pulling the S&P 500 and Nasdaq down. 

Investors are growing concerned about the actual strength and profitability of artificial intelligence demand, which has been a primary driver of the market's recent record-breaking run. Oracle's struggles suggest that the massive capital investments required for AI, such as acquiring expensive chips, may not be translating into immediate or guaranteed profits. This has led to broader anxiety that the AI boom's financial returns might be less certain than previously anticipated, causing traders to pull back from the sector. 

Compounding these worries was the ongoing U.S. government shutdown, in its second week, with no clear resolution in sight from Washington. This political uncertainty drove investors away from riskier assets and towards safe havens, a trend highlighted by gold hitting a record $4,000 per ounce for the first time.

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:

• Semiconductor Manufacturing company Teradyne (NASDAQ: TER) fell 4.2%. Is now the time to buy Teradyne? Access our full analysis report here, it’s free for active Edge members.
• Semiconductor Manufacturing company Entegris (NASDAQ: ENTG) fell 4.6%. Is now the time to buy Entegris? Access our full analysis report here, it’s free for active Edge members.
• Semiconductor Manufacturing company IPG Photonics (NASDAQ: IPGP) fell 5.9%. Is now the time to buy IPG Photonics? Access our full analysis report here, it’s free for active Edge members.
• Processors and Graphics Chips company Penguin Solutions (NASDAQ: PENG) fell 4.6%. Is now the time to buy Penguin Solutions? Access our full analysis report here, it’s free for active Edge members.
• Semiconductor Manufacturing company Kulicke and Soffa (NASDAQ: KLIC) fell 4%. Is now the time to buy Kulicke and Soffa? Access our full analysis report here, it’s free for active Edge members.

Zooming In On IPG Photonics (IPGP)

IPG Photonics’s shares are somewhat volatile and have had 13 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 about 23 hours ago when the stock gained 4.4% as AMD's deal with OpenAI intensified the ongoing AI frenzy that has powered the market. The positive momentum was linked to an announcement that AMD and OpenAI entered into an agreement to power OpenAI's AI infrastructure with AMD's Instinct GPUs. This significant deal underscored the massive demand for advanced chips needed for artificial intelligence applications. The development occurred as the U.S. semiconductor manufacturing industry was already experiencing rapid growth, fueled by AI-driven demand and government support from initiatives like the CHIPS and Science Act.

IPG Photonics is up 14.5% since the beginning of the year, and at $83.18 per share, it is trading close to its 52-week high of $88.19 from October 2025. Investors who bought $1,000 worth of IPG Photonics’s shares 5 years ago would now be looking at an investment worth $471.43.

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