What Happened?
A number of stocks fell in the morning session after a cautious outlook from semiconductor equipment giant ASML sparked a broad sell-off across the sector, hitting chipmakers and equipment suppliers alike.
The negative sentiment was triggered after the Dutch firm, whose complex machines are essential for producing advanced chips, warned it could no longer guarantee growth in 2026. ASML's management cited "increasing uncertainty driven by macro-economic and geopolitical developments," including the potential for new U.S. tariffs. As an industry bellwether, a company whose performance is seen as an indicator of the entire sector's health, ASML's comments are a key signal of future capital spending. The warning sent a chill through the market, as concerns grow that trade tensions could disrupt the highly globalized semiconductor supply chain and slow down investment from chip manufacturers.
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 Amkor (NASDAQ: AMKR) fell 3.3%. Is now the time to buy Amkor? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company Teradyne (NASDAQ: TER) fell 3.4%. Is now the time to buy Teradyne? Access our full analysis report here, it’s free.
Zooming In On Teradyne (TER)
Teradyne’s shares are very volatile and have had 29 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 2 days ago when the stock dropped 3.1% on the news that a recent "Sell" rating initiation from Goldman Sachs cast a shadow over the company's growth prospects. The investment bank set a price target of $80.00, citing concerns that Teradyne is not well-positioned in the high-growth market for testing merchant GPUs (Graphics Processing Units), which are crucial for AI applications. Adding to the bearish sentiment, Goldman Sachs pointed to ongoing cyclical weakness in the industrial markets, which affects Teradyne's robotics business. The firm also expressed uncertainty about the growth trajectory of the company's mobile segment.
Teradyne is down 29.9% since the beginning of the year, and at $88.73 per share, it is trading 45.6% below its 52-week high of $163 from July 2024. Investors who bought $1,000 worth of Teradyne’s shares 5 years ago would now be looking at an investment worth $1,030.
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