What Happened?
A number of stocks fell in the afternoon session after uncertainty increased over when key companies can resume large-scale sales of high-end artificial-intelligence chips to China.
The U.S. government reportedly extended its review of export license applications for AI hardware, such as Nvidia's H200 chips, on national security grounds. This delay created uncertainty for chipmakers and reportedly led some Chinese customers to postpone orders until clearer guidance was issued. While there were earlier signals that some shipments could restart, the extended review process stalled progress, weighing on the stock of major exporters who saw China as a significant market. The situation highlighted the ongoing geopolitical tensions impacting the semiconductor industry's global supply chain.
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:
- Analog Semiconductors company MACOM (NASDAQ:MTSI) fell 3%. Is now the time to buy MACOM? Access our full analysis report here, it’s free.
- Memory Semiconductors company Seagate (NASDAQ:STX) fell 6.1%. Is now the time to buy Seagate? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company Semtech (NASDAQ:SMTC) fell 6.8%. Is now the time to buy Semtech? Access our full analysis report here, it’s free.
Zooming In On Semtech (SMTC)
Semtech’s shares are extremely volatile and have had 47 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 20 days ago when the stock gained 5.2% on the news that industry giant Taiwan Semiconductor Manufacturing Co. posted stronger-than-expected quarterly results, fueling optimism about sustained demand for artificial intelligence (AI) hardware.
As the world's largest contract chipmaker, TSMC's performance is often seen as a key indicator for the entire tech industry. The company reported record fourth-quarter revenue, surpassing Wall Street estimates, driven by robust demand for advanced chips used in AI applications. This positive report has created a ripple effect across the sector, boosting shares of other semiconductor companies and equipment suppliers like ASML, Nvidia, and AMD. Investors are interpreting TSMC's success and its plans to increase capital spending as a strong signal that the AI-driven upcycle for semiconductors is resilient and likely to continue.
Semtech is up 8.7% since the beginning of the year, and at $81.81 per share, it is trading close to its 52-week high of $87.76 from February 2026. Investors who bought $1,000 worth of Semtech’s shares 5 years ago would now be looking at an investment worth $1,131.
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