What Happened?

A number of stocks jumped in the afternoon session after investor fears eased as President Trump softened his tone regarding trade relations with China. 

Following a sharp selloff late last week fueled by threats of an additional 100% tariff on Chinese goods, the president's more conciliatory weekend message that "it will all be fine" sparked a broad market rally. The semiconductor sector, which is particularly sensitive to international trade policies due to its global supply chains, was among the biggest beneficiaries of the improved sentiment. Chipmakers had posted significant declines during the previous week amid escalating tariff concerns. The reversal in tone helped these stocks recover a substantial portion of their recent losses as investors bought back into the sector, relieved that trade tensions might not escalate further.

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:

• Analog Semiconductors company Analog Devices (NASDAQ: ADI) jumped 4.3%. Is now the time to buy Analog Devices? Access our full analysis report here, it’s free for active Edge members.
• Processors and Graphics Chips company Qorvo (NASDAQ: QRVO) jumped 4.8%. Is now the time to buy Qorvo? Access our full analysis report here, it’s free for active Edge members.
• Analog Semiconductors company Skyworks Solutions (NASDAQ: SWKS) jumped 4.8%. Is now the time to buy Skyworks Solutions? Access our full analysis report here, it’s free for active Edge members.
• Analog Semiconductors company Universal Display (NASDAQ: OLED) jumped 4.5%. Is now the time to buy Universal Display? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Qorvo (QRVO)

Qorvo’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 3 days ago when the stock dropped 4.2% as President Donald Trump threatened to impose 'massive' new tariffs on Chinese goods. President Donald Trump's threat of "massive" new tariffs on Chinese goods sent shockwaves through the market, directly impacting chipmakers like Nvidia and AMD. Trump noted China's tightening controls on rare earth metals, which are vital components in many technology products from electric vehicles to defense systems. 

Compounding the pressure, Beijing has reportedly initiated its own countermeasures. These include tightening export controls on crucial raw materials such as rare earths and launching an antimonopoly investigation into chip giant Qualcomm. Furthermore, reports indicate that Chinese customs officials are now conducting stringent checks on semiconductor shipments arriving at ports, specifically targeting certain high-end chips. This escalating back-and-forth creates significant uncertainty for the semiconductor industry, which relies heavily on complex global supply chains and access to international markets, leading to a broad sell-off across the sector.

Qorvo is up 26.9% since the beginning of the year, but at $88.52 per share, it is still trading 15.4% below its 52-week high of $104.58 from October 2024. Investors who bought $1,000 worth of Qorvo’s shares 5 years ago would now be looking at an investment worth $654.88.

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