What Happened?
A number of stocks fell in the afternoon session after President Donald Trump threatened to impose 'massive' new tariffs on Chinese goods, a response to Beijing's decision to tighten export controls on rare earth metals.
The escalating trade friction sent shockwaves through the market, with the PHLX Semiconductor Index (SOX) falling 4%. The move from China involves expanding restrictions on several rare earth elements, which are critical components for a wide range of high-tech products, including semiconductors. President Trump's retaliatory tariff threat intensified investor concerns about potential supply chain disruptions and increased costs for chipmakers. This geopolitical tension has created significant uncertainty, leading to a broad sell-off in the tech sector and pulling down major indexes like the S&P 500 and Nasdaq.
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 IPG Photonics (NASDAQ: IPGP) fell 5.7%. Is now the time to buy IPG Photonics? Access our full analysis report here, it’s free for active Edge members.
- Analog Semiconductors company Analog Devices (NASDAQ: ADI) fell 4.1%. Is now the time to buy Analog Devices? Access our full analysis report here, it’s free for active Edge members.
- Semiconductor Manufacturing company Applied Materials (NASDAQ: AMAT) fell 3.2%. Is now the time to buy Applied Materials? Access our full analysis report here, it’s free for active Edge members.
- Processors and Graphics Chips company Broadcom (NASDAQ: AVGO) fell 4.4%. Is now the time to buy Broadcom? Access our full analysis report here, it’s free for active Edge members.
- Semiconductor Manufacturing company KLA Corporation (NASDAQ: KLAC) fell 5.3%. Is now the time to buy KLA Corporation? Access our full analysis report here, it’s free for active Edge members.
Zooming In On IPG Photonics (IPGP)
IPG Photonics’s shares are somewhat volatile and have had 13 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 2 days ago when the stock gained 3.3% as renewed confidence in the artificial intelligence sector fueled a market rally as Nvidia's CEO confirmed that computing demand has "gone up substantially." These comments helped reassure the market that the AI boom is supported by genuine demand, calming fears that were sparked a day earlier by a report questioning the profitability of Oracle's cloud business. The rally was strong enough to put the information technology sector on pace for a fresh closing high. This upward momentum occurred despite potential headwinds from an ongoing U.S. government shutdown, which entered its second week.
IPG Photonics is up 12.2% since the beginning of the year, and at $81.55 per share, it is trading close to its 52-week high of $88.19 from October 2025. Investors who bought $1,000 worth of IPG Photonics’s shares 5 years ago would now be looking at an investment worth $448.32.
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