What Happened?
A number of stocks jumped in the afternoon session after traders positioned ahead of Nvidia's fiscal Q1 earnings.
Nvidia accounted for a significant percentage of the S&P 500's gains heading into the announcement, making the print the binary catalyst for the entire AI-infrastructure complex — networking ASICs, connectivity silicon, memory, and packaging all move together on the read-through.
Falling oil prices also supported the bullish sentiment. Semis carry arguably the longest-dated cash flows in the equity market because most of their value sits in 2027–2030 AI capex, not in the current quarter.
When Brent crude drops 5.21% (like it did during the session), expected inflation falls, the Fed gets more room to cut, and the discount rate applied to those distant cash flows compresses. A small rate move produces an outsized stock move, which is why a 5% oil decline can power 8%+ chip rallies on the same day.
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 Nova (NASDAQ: NVMI) jumped 4.2%. Is now the time to buy Nova? Access our full analysis report here, it’s free.
- Memory Semiconductors company Micron (NASDAQ: MU) jumped 4.8%. Is now the time to buy Micron? Access our full analysis report here, it’s free.
- Processors and Graphics Chips company Qualcomm (NASDAQ: QCOM) jumped 4%. Is now the time to buy Qualcomm? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company Amkor (NASDAQ: AMKR) jumped 3.5%. Is now the time to buy Amkor? Access our full analysis report here, it’s free.
- Processors and Graphics Chips company Allegro MicroSystems (NASDAQ: ALGM) jumped 6.4%. Is now the time to buy Allegro MicroSystems? Access our full analysis report here, it’s free.
Zooming In On Allegro MicroSystems (ALGM)
Allegro MicroSystems’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 4.4% as a broad-based sell-off hit the semiconductor sector following news of a potential strike at Samsung and a stake sale by Taiwan Semiconductor Manufacturing (TSMC), which rattled global chip supply chains. These events highlighted significant supply-chain risks, triggering a sharp reversal across the chip industry.
Adding to the sector's weakness were rising valuation concerns, inflation fears, and broader market jitters that led to renewed selling pressure on major companies like NVIDIA, Intel, and Micron Technology.
Furthermore, ongoing supply constraints for rare earth materials, which are used in semiconductor manufacturing, reportedly caused delays and higher input costs for firms in the sector, compounding the negative sentiment for chip-related stocks.
Allegro MicroSystems is up 65.2% since the beginning of the year, but at $44.45 per share, it is still trading 13.5% below its 52-week high of $51.37 from May 2026. Investors who bought $1,000 worth of Allegro MicroSystems’s shares 5 years ago would now be looking at an investment worth $1,808.
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