What Happened?

A number of stocks fell in the afternoon session after the semiconductor sector tumbled as a 'buy the rumor, sell the news' event unfolded around AI-chip leader Nvidia, despite its strong earnings report. 

Even though Nvidia reported better-than-expected fiscal fourth-quarter results and provided upbeat guidance, its shares fell, dragging the broader market with it. The sell-off triggered a plunge in the Philadelphia Semiconductor Index and pulled down peers like Broadcom, Micron, and AMD. Analysts suggest the focus for investors has shifted from Nvidia's stellar performance to broader concerns, including growing competition in the artificial intelligence sector and whether the high levels of investment in the AI space are sustainable. This negative reaction highlights a cautious sentiment, where even positive news couldn't sustain the sector's upward momentum.

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 FormFactor (NASDAQ: FORM) fell 8.9%. Is now the time to buy FormFactor? Access our full analysis report here, it’s free.
• Semiconductor Manufacturing company Amkor (NASDAQ: AMKR) fell 6.6%. Is now the time to buy Amkor? Access our full analysis report here, it’s free.
• Semiconductor Manufacturing company Kulicke and Soffa (NASDAQ: KLIC) fell 3.8%. Is now the time to buy Kulicke and Soffa? Access our full analysis report here, it’s free.
• Semiconductor Manufacturing company Entegris (NASDAQ: ENTG) fell 4.6%. Is now the time to buy Entegris? Access our full analysis report here, it’s free.

Zooming In On FormFactor (FORM)

FormFactor’s shares are extremely volatile and have had 36 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 gained 4.4% on the news that the semiconductor sector received a major boost as Advanced Micro Devices (AMD) secured a deal to sell up to US$60 billion in artificial intelligence chips to Meta Platforms over five years. This landmark agreement, which also allows Meta to purchase as much as 10% of the chip firm, is one of the latest blockbuster deals in the artificial intelligence space, signaling massive investment by tech giants. The news prompted a significant rally in AMD's shares, which jumped more than 10% in premarket trading. The deal not only highlights the immense demand for specialized AI hardware but also contributed to a broader rebound in technology stocks, helping to ease recent investor fears about the disruptive impacts of AI.

FormFactor is up 62.9% since the beginning of the year, and at $96.44 per share, it is trading close to its 52-week high of $105.83 from February 2026. Investors who bought $1,000 worth of FormFactor’s shares 5 years ago would now be looking at an investment worth $2,126.

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