What Happened?
Shares of network chips maker MACOM Technology Solutions (NASDAQ: MTSI) fell 6.1% in the afternoon session after concerns were raised about high valuations for artificial intelligence (AI) stocks.
The decline was part of a wider market retreat, with the tech-heavy Nasdaq falling by 1.5% and other major indexes also pulling back. The semiconductor industry was hit particularly hard, as shown by a nearly 3% plunge in the Philadelphia Semiconductor Index. Investors appeared to have concerns, questioning if the high stock prices in the sector were justified. Adding to the concern, reports revealed that a critical $10 billion funding deal between cloud giant Oracle and Blue Owl Capital for a Michigan data center stalled. While Oracle disputed the narrative, claiming they selected a different equity partner, the reported reason for Blue Owl's exit sparked widespread anxiety: concerns over Oracle's ballooning debt and "unfavorable" terms.
As a result, investors grew increasingly concerned that hyperscalers relied more on risky private equity structures to build infrastructure rather than using their own capital.
The shares closed the day at $168.39, down 4.2% from previous close.
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What Is The Market Telling Us
MACOM’s shares are very volatile and have had 23 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 23 days ago when the stock gained 4.1% on the news that renewed enthusiasm for Alphabet reinvigorated the artificial intelligence trade, propelling a market rebound heading into the Thanksgiving holiday.
The Nasdaq index jumped 2.6% and the S&P 500 gained 1.6%, driven by a 5% rally in Alphabet following the announcement of its upgraded Gemini 3 AI model. This optimism spilled over into the broader tech sector, lifting shares of Broadcom, Micron, and Palantir significantly. The rally built on momentum from the previous trading session, sparked by the New York Fed president keeping the door open for a December interest rate cut.
MACOM is up 29% since the beginning of the year, but at $167 per share, it is still trading 12% below its 52-week high of $189.86 from December 2025. Investors who bought $1,000 worth of MACOM’s shares 5 years ago would now be looking at an investment worth $3,336.
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