What Happened?
Shares of semiconductor testing company FormFactor (NASDAQ: FORM) jumped 6.5% in the morning session after a major AI-focused partnership in the chip sector boosted sentiment for stocks with exposure to the AI 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.
Is now the time to buy FormFactor? Access our full analysis report here.
What Is The Market Telling Us
FormFactor’s shares are very volatile and have had 28 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 8 months ago when the stock dropped 29.5% on the news that the company reported a disappointing quarter, with EPS and adjusted operating income missing analysts' expectations.
While revenue met expectations, it declined sequentially, and management pointed to weak demand in key high-volume markets like client PCs and mobile handsets, which could weigh on future growth. Also, the company expects reduced demand for both non-HBM DRAM probe cards and Systems. As a result, both revenue and EPS guidance for the next quarter fell short. Overall, this was a bad quarter.
FormFactor is down 4.8% since the beginning of the year, and at $42.11 per share, it is trading 13.6% below its 52-week high of $48.72 from October 2024. Investors who bought $1,000 worth of FormFactor’s shares 5 years ago would now be looking at an investment worth $1,605.
Do you want to know what moves the business you care about? Add them to your StockStory watchlist and every time a stock significantly moves, we provide you with a timely explanation straight to your inbox. It’s free for active Edge members and will only take you a second.
