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:
- Processors and Graphics Chips company Penguin Solutions (NASDAQ: PENG) fell 3.4%. Is now the time to buy Penguin Solutions? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company IPG Photonics (NASDAQ: IPGP) fell 4%. Is now the time to buy IPG Photonics? Access our full analysis report here, it’s free.
Zooming In On IPG Photonics (IPGP)
IPG Photonics’s shares are very volatile and have had 22 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 about 24 hours ago when the stock dropped 6% 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.
IPG Photonics is up 50.5% since the beginning of the year, but at $112.62 per share, it is still trading 26.8% below its 52-week high of $153.91 from February 2026. Despite the year-to-date gain, investors who bought $1,000 worth of IPG Photonics’s shares 5 years ago would now be looking at only $489.93.
ALSO WORTH WATCHING: Nvidia’s Quiet Partner. Nvidia’s chips cost a hundred grand. The connectors that make them work cost even more. One company makes them all.
Every AI server needs specialized infrastructure the chip companies don’t make. High-speed cables. Power connectors. Thermal sensors. This 90-year-old company built a monopoly on it. The AI boom just started. This stock is still flying under the radar. Claim The Stock Ticker Here for FREE.
