What Happened?

A number of stocks jumped in the afternoon session after Nvidia announced a strategic partnership and a $2 billion investment in fellow chipmaker Marvell Technology. 

Following the news, Marvell's stock surged 6.9%, while Nvidia's shares also climbed, providing a lift to the broader semiconductor sector. The collaboration aims to connect Marvell to NVIDIA's AI ecosystem through its NVLink Fusion technology, giving customers more flexibility in developing advanced infrastructure. This significant investment by the AI chip leader stressed the continued rapid expansion and high-stakes competition within the artificial intelligence hardware industry, boosting investor confidence across the sector.

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 Allegro MicroSystems (NASDAQ: ALGM) jumped 5.2%. Is now the time to buy Allegro MicroSystems? Access our full analysis report here, it’s free.
• Semiconductor Manufacturing company Amkor (NASDAQ: AMKR) jumped 5.1%. Is now the time to buy Amkor? Access our full analysis report here, it’s free.
• Analog Semiconductors company NXP Semiconductors (NASDAQ: NXPI) jumped 2.8%. Is now the time to buy NXP Semiconductors? Access our full analysis report here, it’s free.
• Semiconductor Manufacturing company Photronics (NASDAQ: PLAB) jumped 3.8%. Is now the time to buy Photronics? Access our full analysis report here, it’s free.
• Semiconductor Manufacturing company Lam Research (NASDAQ: LRCX) jumped 2.7%. Is now the time to buy Lam Research? Access our full analysis report here, it’s free.

Zooming In On Allegro MicroSystems (ALGM)

Allegro MicroSystems’s shares are extremely volatile and have had 33 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 5.1% on the news that rising geopolitical tensions from the Iran war, threatened to disrupt critical supply chains. 

The conflict raised alarms beyond oil prices, with a significant risk looming over the supply of essential gases, such as helium, which are vital for semiconductor manufacturing. Major chip fabricators, including Taiwan Semiconductor Manufacturing Company, Samsung Electronics, and SK hynix, were projected to face significant production challenges in the event of a supply constraint. Such disruptions would create cascading effects across the tech industry, impacting the production of everything from Apple's iPhones to Nvidia's advanced AI servers. The uncertainty has contributed to a broader market downturn, pushing the Nasdaq into a correction.

Allegro MicroSystems is up 12.9% since the beginning of the year, but at $30.39 per share, it is still trading 29% below its 52-week high of $42.81 from February 2026. Investors who bought $1,000 worth of Allegro MicroSystems’s shares 5 years ago would now be looking at an investment worth $1,198.

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