What Happened?
A number of stocks jumped in the afternoon session after semiconductor stocks rebounded amid dip buying following a recent selloff, as reports revealed that China may ease restrictions on advanced Nvidia AI chip imports.
Following sessions of profit-taking that dragged down the entire sector, semiconductor stocks rebounded strongly.
The reversal was triggered by a report from The Information that Chinese authorities recently informed top technology companies, including Alibaba, ByteDance, and DeepSeek, that they may soon receive permission to purchase a limited quantity (capped under 200,000 units) of Nvidia's H200 AI processors for model training.
Supporting the improved outlook for chip stocks, reports revealed that SK Hynix's $24.5 billion U.S. ADR offering was oversubscribed by more than seven times, proving that institutional appetite for AI memory chips remains highly robust.
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 6.9%. Is now the time to buy Nova? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company Lam Research (NASDAQ: LRCX) jumped 7.3%. Is now the time to buy Lam Research? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company Teradyne (NASDAQ: TER) jumped 5.9%. Is now the time to buy Teradyne? Access our full analysis report here, it’s free.
Zooming In On Lam Research (LRCX)
Lam Research’s shares are extremely volatile and have had 35 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 7 days ago when the stock dropped 12.1% after the semiconductor sector pulled back amid fears that AI-driven chip demand may be cooling.
The broader Philadelphia Semiconductor Index plunged over 7%, dragging down chipmakers. The negative sentiment was amplified by a warning from a Citi analyst who questioned whether large cloud platforms would continue their high rate of spending on AI infrastructure if they could not show investors the cost was generating returns.
Additionally, reports of Meta's plan to sell access to its AI computing power sparked fears of future overcapacity in the industry. For two years the sector traded on an assumption of an insatiable GPU and memory shortage. If Meta, which guided to as much as $145 billion of capex for the year, has enough spare capacity to lease it out, the market reads that as a signal hyperscalers may have over-built, meaning future orders for GPUs, HBM and NAND could shrink.
A secondary catalyst pressured the Koreans specifically: reports that Apple was in talks to source chips from two Chinese suppliers, raising competitive and pricing fears. Underlying all of it is profit-taking.
Lam Research is up 90.2% since the beginning of the year, and at $352.15 per share, it is trading close to its 52-week high of $362.52 from June 2026. Investors who bought $1,000 worth of Lam Research’s shares 5 years ago would now be looking at an investment worth $5,744.
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