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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

Power Integrations (POWI) Stock Trades Down, Here Is Why

POWI Cover Image

What Happened?

Shares of semiconductor designer Power Integrations (NASDAQ: POWI) fell 3.1% in the morning session as the stock fell amid broader weakness in the semiconductor sector after industry bellwether Texas Instruments signaled softer demand and issued a cautious outlook. Texas Instruments, a key chipmaker for various industries, sparked concern after it provided a weaker-than-expected forecast for the remainder of the year. Analysts on the company's earnings call noted a "tone shift" from executives regarding the semiconductor recovery cycle compared to previous quarters. The change in messaging from a major industry player created uncertainty about the health of the overall chip market. This cautious sentiment appeared to weigh on related stocks, including Power Integrations, as investors reassessed the sector's near-term growth prospects.

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 Power Integrations? Access our full analysis report here, it’s free.

What Is The Market Telling Us

Power Integrations’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 biggest move we wrote about over the last year was 2 months ago when the stock dropped 7.4% on the news that the company reported weak first quarter 2025 results, its inventory levels increased and revenue was only in-line with expectations. The result revealed muted sequential growth, as sales edged up just slightly from the prior quarter despite growing 15% year-over-year. 

Looking ahead, revenue guidance for next quarter was just in line as well. On the other hand, Power Integrations beat analysts' adjusted operating income and EPS expectations this quarter. Still, we think this was a mixed quarter. The market seemed to be hoping for more.

Power Integrations is down 12.6% since the beginning of the year, and at $53.11 per share, it is trading 28.8% below its 52-week high of $74.58 from July 2024. Investors who bought $1,000 worth of Power Integrations’s shares 5 years ago would now be looking at an investment worth $894.64.

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.

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