What Happened?
A number of stocks fell in the morning session after the 30-year U.S. Treasury yield hit a 19-year high and oil stayed elevated as a window for a U.S.–Iran deal closed without a breakthrough, a CNBC report revealed.
Deutsche Bank’s Jim Reid wrote in a note (reported by CNBC) that “with little sign of a U.S.–Iran deal, investors priced in a more extended closure of the Strait of Hormuz and a longer stretch of higher oil.” That is a problem for chip stocks twice over: it lifts the discount rate applied to future earnings, and it raises the cost of financing the same data-center buildout those earnings depend on.
Carl Weinberg, founder of High Frequency Economics, told CNBC’s “Squawk Box Europe” that AI infrastructure borrowing is competing with governments for the same pool of savings and helping push bond yields higher, a loop that then feeds back into lower chip valuations.
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:
- Memory Semiconductors company Western Digital (NASDAQ: WDC) fell 8.3%. Is now the time to buy Western Digital? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company Nova (NASDAQ: NVMI) fell 7.8%. Is now the time to buy Nova? Access our full analysis report here, it’s free.
- Processors and Graphics Chips company Penguin Solutions (NASDAQ: PENG) fell 8.6%. Is now the time to buy Penguin Solutions? Access our full analysis report here, it’s free.
Zooming In On Penguin Solutions (PENG)
Penguin Solutions’s shares are extremely volatile and have had 55 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 6 days ago when the stock gained 4.7% on the news that a wave of upbeat earnings reports and bullish forecasts from key industry players signaled robust and sustained demand for artificial intelligence technology.
The rally was sparked by strong quarterly results from several AI-related firms, reinforcing investor confidence in the sector. Super Micro Computer, a seller of servers and other AI equipment, saw its shares jump after its earnings per share came in 84% higher than expected and it provided a revenue forecast that topped estimates. Similarly, CoreWeave, which provides cloud computing for AI systems, rallied after its sales forecast also exceeded expectations.
This positive sentiment echoed globally, with Asian markets gaining as traders bought into AI- and semiconductor-related shares. The optimism is further supported by fundamental data, such as a reported 155% year-over-year surge in South Korea's semiconductor exports for early August. AI racks consume GPUs, CPUs, high-bandwidth memory, and storage.
When a large server OEM and a major AI cloud operator both lift the path of future shipments, investors typically reprice the chip makers that supply those systems which helps explain the gains in Nvidia, AMD, and Intel.
Penguin Solutions is up 190% since the beginning of the year, but at $58.74 per share, it is still trading 27.8% below its 52-week high of $81.39 from July 2026. Investors who bought $1,000 worth of Penguin Solutions’s shares 5 years ago would now be looking at an investment worth $2,781.
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