What Happened?

A number of stocks fell in the afternoon session after investors grew concerned over the profitability timeline of artificial intelligence (AI) investments following financial reports from industry giants. 

Fears of an AI bubble resurfaced after Oracle reported higher-than-expected capital spending alongside lower revenue and operating income. The news sent Oracle's shares plummeting and created a ripple effect across the AI landscape, dragging down chipmakers like Nvidia and Micron Technology. The negative sentiment was so pervasive that even Broadcom, which posted better-than-expected results, saw its stock decline. The market reaction signals investor anxiety about when the massive capital expenditures on AI infrastructure will translate into tangible profits, leading to a broader rotation out of big tech names.

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 Amkor (NASDAQ: AMKR) fell 5.7%. Is now the time to buy Amkor? Access our full analysis report here, it’s free for active Edge members.
• Memory Semiconductors company Seagate Technology (NASDAQ: STX) fell 6.4%. Is now the time to buy Seagate Technology? Access our full analysis report here, it’s free for active Edge members.
• Semiconductor Manufacturing company Semtech (NASDAQ: SMTC) fell 7%. Is now the time to buy Semtech? Access our full analysis report here, it’s free for active Edge members.
• Semiconductor Manufacturing company Photronics (NASDAQ: PLAB) fell 7.9%. Is now the time to buy Photronics? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Photronics (PLAB)

Photronics’s shares are quite volatile and have had 19 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 1 day ago when the stock gained 4.1% on the news that the stock's positive momentum continued as the company reported impressive fourth-quarter 2025 financial results that beat expectations, which was followed by positive analyst actions. 

The company posted revenue of $215.8 million and earnings of $0.60 per share, both of which were higher than analysts had forecast. Net income also saw a large increase, jumping to $61.8 million from $33.9 million in the same quarter of the previous year. Looking ahead, Photronics provided an optimistic forecast for the first quarter of fiscal 2026, with expected revenue and earnings also topping analyst predictions. In response to the strong performance, driven by its high-end integrated circuit business, both Craig-Hallum and DA Davidson raised their price targets on the stock to $42 and $45, respectively, while keeping their 'Buy' ratings.

Photronics is up 50.4% since the beginning of the year, and at $36.11 per share, it is trading close to its 52-week high of $39.67 from December 2025. Investors who bought $1,000 worth of Photronics’s shares 5 years ago would now be looking at an investment worth $3,244.

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