What Happened?

A number of stocks fell in the morning session after investors reassessed stretched valuations following a period of strong gains.

The tech-heavy Nasdaq fell as much as 1.6%, with the S&P 500 also declining. The pullback was exemplified by AI firm Palantir Technologies, which dropped over 7% despite reporting better-than-expected sales. This negative reaction to positive news suggests investors are concerned about extreme valuations and are engaging in "long liquidation"—selling positions to lock in profits after a significant rally. Adding serious weight to this caution, leadership at both Goldman Sachs and Morgan Stanley highlighted the possibility of a correction in the equity markets over the next couple of years. Despite the euphoria driven by AI optimism and the promise of future rate cuts, these banks viewed this cooling-off period not as a disaster, but as a necessary and healthy feature of a long-term bull market.

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:

• Processors and Graphics Chips company Allegro MicroSystems (NASDAQ: ALGM) fell 2.8%. Is now the time to buy Allegro MicroSystems? Access our full analysis report here, it’s free for active Edge members.
• Semiconductor Manufacturing company Amkor (NASDAQ: AMKR) fell 4.8%. Is now the time to buy Amkor? Access our full analysis report here, it’s free for active Edge members.
• Semiconductor Manufacturing company Entegris (NASDAQ: ENTG) fell 2.8%. Is now the time to buy Entegris? Access our full analysis report here, it’s free for active Edge members.
• Semiconductor Manufacturing company Semtech (NASDAQ: SMTC) fell 2.6%. Is now the time to buy Semtech? Access our full analysis report here, it’s free for active Edge members.
• Semiconductor Manufacturing company Photronics (NASDAQ: PLAB) fell 3.4%. Is now the time to buy Photronics? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Amkor (AMKR)

Amkor’s shares are quite volatile and have had 19 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 1 day ago when the stock gained 15.5% on the news that Aletheia Capital initiated coverage on the company with a 'Buy' rating and a $62 price target. The firm highlighted Amkor's position as a leading U.S.-based provider for semiconductor assembly and testing. The positive outlook was based on rising demand for advanced chip packaging, known as CoWoS, and the America Manufacturing initiative. Aletheia Capital projected significant growth in the company's CoWoS sales and earnings per share over the next few years. The bullish analyst coverage was supported by Amkor's third-quarter financial results, where both revenue and profit exceeded Wall Street's expectations. The company reported revenue of $1.99 billion and earnings per share of $0.51, beating estimates. However, its revenue guidance for the fourth quarter was slightly below analyst forecasts.

Amkor is up 39.3% since the beginning of the year, and at $36.26 per share, it is trading close to its 52-week high of $37.84 from November 2025. Investors who bought $1,000 worth of Amkor’s shares 5 years ago would now be looking at an investment worth $2,906.

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