What Happened?
A number of stocks jumped in the afternoon session after the broader semiconductor sector recovered from a sharp selloff during the previous trading session.
The decisive tone-setter was Nvidia CEO Jensen Huang, who described the previous week's selloff as a chance to "buy at a discount," adding that the AI revolution is still "at the beginning." That framing, was enough to stabilize sentiment in a sector that had erased $1 trillion in market cap in a single session.
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 Applied Materials (NASDAQ: AMAT) jumped 9.1%. Is now the time to buy Applied Materials? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company KLA Corporation (NASDAQ: KLAC) jumped 10.3%. Is now the time to buy KLA Corporation? Access our full analysis report here, it’s free.
Zooming In On KLA Corporation (KLAC)
KLA Corporation’s shares are very volatile and have had 23 moves greater than 5% over the last year. But moves this big are rare even for KLA Corporation and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 6% on the news that the AVGO earnings overhang and the stronger-than-expected jobs report combined to drive one of the broadest global chip selloff of the year.
The damage spread globally: South Korea's Kospi fell 5.5%, with Samsung down 6.4% and SK Hynix nearly 10%. European names followed: ASML fell 3.8% and Infineon lost more than 6%. Broadcom's guidance miss reset expectations for the pace of hyperscaler AI chip spending, removing the sector's most visible growth catalyst.
The 172,000-payroll print then eliminated near-term rate cut hopes and introduced rate hike risk by year end per CME FedWatch. Semiconductor valuations, built on aggressive multi-year earnings assumptions, are acutely sensitive to these discount rate movements.
KLA Corporation is up 65.4% since the beginning of the year, and at $2,107 per share, it is trading close to its 52-week high of $2,131 from June 2026. Investors who bought $1,000 worth of KLA Corporation’s shares 5 years ago would now be looking at an investment worth $6,716.
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