What Happened?
Shares of semiconductor packaging and testing company Amkor Technology (NASDAQ: AMKR) jumped 4.6% in the morning session after the company was highlighted as a key partner in Apple's U.S. manufacturing strategy.
The stock's rise was partly sparked by a video clip of Apple CEO Tim Cook on CNBC, where he reiterated Amkor's significance as a packaging partner. This public endorsement solidifies the semiconductor firm's crucial role in Apple's initiative to move parts of its supply chain to the United States, a process often called "reshoring." The announcement was well-received by investors, as the stock surged, signaling strong confidence in the collaboration.
After the initial pop the shares cooled down to $26.61, up 3.6% from previous close.
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What Is The Market Telling Us
Amkor’s shares are quite volatile and have had 16 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 25 days ago when the stock gained 4.7% on the news that its stock was lifted by a broad market rally that overshadowed negative reports concerning a key customer.
The positive move came despite reports that Nvidia, a major client, instructed component suppliers including Amkor to halt production of its H20 AI chip. This chip was specifically designed for the Chinese market, but Beijing has reportedly raised security concerns and urged local companies to avoid using it. The production halt has led to semi-finished semiconductors 'piling up' at Amkor's packaging facilities, creating a potential inventory issue. However, the negative impact of this news was seemingly offset by strong positive sentiment across the wider market, as major indices surged following indications from the Federal Reserve that interest rate cuts could be on the horizon.
Amkor is up 2.3% since the beginning of the year, but at $26.61 per share, it is still trading 16.6% below its 52-week high of $31.91 from September 2024. Investors who bought $1,000 worth of Amkor’s shares 5 years ago would now be looking at an investment worth $2,316.
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