What Happened?
A number of stocks fell in the afternoon session after Intel reported disappointing earnings report and weak forecast for the current quarter.
Shares of the chipmaker plunged about 12% after it posted a fourth-quarter loss and provided a softer-than-expected outlook. The company's first-quarter revenue projections of $11.7 billion to $12.7 billion fell short of analyst consensus. More concerning for the broader sector, Intel executives flagged industry-wide supply shortages as a significant problem that could persist into 2026, with supply capabilities expected to be at their lowest point in the first quarter. When a market leader like Intel signals such widespread issues, it often creates a ripple effect, raising investor concerns about the health and near-term prospects of the entire semiconductor industry.
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 Magnachip (NYSE: MX) fell 4.6%. Is now the time to buy Magnachip? Access our full analysis report here, it’s free.
- Analog Semiconductors company Vishay Intertechnology (NYSE: VSH) fell 3.3%. Is now the time to buy Vishay Intertechnology? Access our full analysis report here, it’s free.
- Analog Semiconductors company Power Integrations (NASDAQ: POWI) fell 2.7%. Is now the time to buy Power Integrations? Access our full analysis report here, it’s free.
- Analog Semiconductors company onsemi (NASDAQ: ON) fell 2.7%. Is now the time to buy onsemi? Access our full analysis report here, it’s free.
- Processors and Graphics Chips company Allegro MicroSystems (NASDAQ: ALGM) fell 3.6%. Is now the time to buy Allegro MicroSystems? Access our full analysis report here, it’s free.
Zooming In On Magnachip (MX)
Magnachip’s shares are extremely volatile and have had 30 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 17 days ago when the stock gained 3.2% on the news that a broader market rally drove investor optimism in artificial intelligence and big tech stocks.
The S&P 500, Dow Jones, and Nasdaq all pushed higher, approaching record levels set late last year. Much of the positive momentum was linked to the technology sector, with a particular focus on companies advancing artificial intelligence, a key theme at the annual CES trade show in Las Vegas. This continued a powerful trend from 2025, when AI-related developments were a primary catalyst for the market's bull run. The upbeat sentiment was further supported by hopes for easier monetary policy from the Federal Reserve following a weaker-than-expected US Services PMI reading.
Magnachip is up 11.8% since the beginning of the year, but at $3.00 per share, it is still trading 40.5% below its 52-week high of $5.03 from February 2025. Investors who bought $1,000 worth of Magnachip’s shares 5 years ago would now be looking at an investment worth $165.38.
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