What Happened?
A number of stocks fell in the afternoon session after the AVGO earnings overhang and the stronger-than-expected jobs report combined to drive one of the broadest global chip selloff of the year.
The damage spread globally: South Korea's Kospi fell 5.5%, with Samsung down 6.4% and SK Hynix nearly 10%. European names followed: ASML fell 3.8% and Infineon lost more than 6%. The mechanism is two-fold. Broadcom's guidance miss reset expectations for the pace of hyperscaler AI chip spending, removing the sector's most visible growth catalyst. The 172,000-payroll print then eliminated near-term rate cut hopes and introduced rate hike risk by year end per CME FedWatch. Semiconductor valuations, built on aggressive multi-year earnings assumptions, are acutely sensitive to these discount rate movements.
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 Semtech (NASDAQ: SMTC) fell 8.4%. Is now the time to buy Semtech? Access our full analysis report here, it’s free.
- Analog Semiconductors company Impinj (NASDAQ: PI) fell 8.7%. Is now the time to buy Impinj? Access our full analysis report here, it’s free.
- Memory Semiconductors company Western Digital (NASDAQ: WDC) fell 8.6%. Is now the time to buy Western Digital? Access our full analysis report here, it’s free.
Zooming In On Impinj (PI)
Impinj’s shares are extremely volatile and have had 43 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 14 days ago when the stock gained 7.7% on the news that risk-on sentiment returned on Iran peace progress as Treasury yields cooled.
Analog chips (Texas Instruments, Analog Devices, NXP, ON Semi, Microchip) are the workhorse semiconductors inside cars, industrial machinery, medical devices, and consumer electronics. They're tied to broad industrial and auto production, both of which rallied during the day.
Analog chip companies have been working through a two-year inventory correction, where customers like auto OEMs and industrial equipment makers over-ordered during the pandemic and have been drawing down ever since. When the economic outlook improves: Dow at 50,700, yields cooling, peace progress on the table, customers shift from drawing down inventory to placing fresh orders. That's the moment the cycle turns.
Impinj is down 30.6% since the beginning of the year, and at $124.69 per share, it is trading 48.5% below its 52-week high of $241.91 from October 2025. Despite the year-to-date decline, investors who bought $1,000 worth of Impinj’s shares 5 years ago would now be looking at an investment worth $2,474.
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