What Happened?
A number of stocks fell in the afternoon session after a broad selloff swept through the semiconductor industry, sparked by concerns over the future of artificial intelligence spending and rising geopolitical risks.
The negative sentiment followed a report from The Wall Street Journal which revealed that the AI firm OpenAI had missed internal targets for both new users and revenue. This news raised investor fears that a key player in the AI space might pull back on its heavy spending on data center infrastructure, potentially reducing demand for chips. Compounding these worries were escalating tensions between the U.S. and China over AI technology and broader concerns about global supply chain disruptions. The selloff was not isolated, affecting numerous semiconductor and AI-related stocks as investors reacted to the sector-wide headwinds.
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 Lam Research (NASDAQ: LRCX) fell 3.4%. Is now the time to buy Lam Research? Access our full analysis report here, it’s free.
- Analog Semiconductors company Universal Display (NASDAQ: OLED) fell 4.4%. Is now the time to buy Universal Display? Access our full analysis report here, it’s free.
Zooming In On Universal Display (OLED)
Universal Display’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 24 hours ago when the stock dropped 4.4% on the news that semiconductor stocks pulled back following a rally the previous week as geopolitical tensions between the US and China increased over artificial intelligence technology.
The contest over AI entered a more confrontational phase after China ordered Meta to unwind its $2 billion acquisition of the AI startup Manus, citing national security concerns. This move was seen as a direct intervention to limit foreign access to its advanced technology sector. Adding to the friction, the White House accused China of stealing American AI technology on an "industrial scale" and has warned of intensified crackdowns. This struggle over talent, intellectual property, and strategic technologies created significant uncertainty for companies operating in the global AI landscape, as national interests increasingly dictate corporate activity.
Contributing to the weakness was the continued concerns over global supply chain disruptions stemming from the conflict involving the US, Israel, and Iran. The crisis also led to higher raw material costs for a wide variety of industries. This geopolitical instability is raising concerns among investors about potential production delays and increased operational costs for technology hardware companies.
Universal Display is down 25.3% since the beginning of the year, and at $91.07 per share, it is trading 43.6% below its 52-week high of $161.44 from July 2025. Investors who bought $1,000 worth of Universal Display’s shares 5 years ago would now be looking at only $391.04.
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