What Happened?
A number of stocks jumped in the afternoon session after growing optimism surrounding agentic artificial intelligence and Meta Platforms' Muse application fueled expectations of higher demand for central processing units.
Reuters reported that Meta's Muse application has highlighted the specialized hardware needed to support these next-generation workflows. While initial generative AI infrastructure prioritized graphics accelerators for model training, agentic frameworks depend heavily on central processing units to coordinate complex operations and manage logic across sequential processes. This shift suggests a broadened demand profile across semiconductor hardware suppliers as autonomous enterprise software capabilities expand.
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 FormFactor (NASDAQ: FORM) jumped 4.6%. Is now the time to buy FormFactor? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company Kulicke and Soffa (NASDAQ: KLIC) jumped 4.8%. Is now the time to buy Kulicke and Soffa? Access our full analysis report here, it’s free.
- Analog Semiconductors company Monolithic Power Systems (NASDAQ: MPWR) jumped 8.3%. Is now the time to buy Monolithic Power Systems? Access our full analysis report here, it’s free.
- Memory Semiconductors company Micron (NASDAQ: MU) jumped 4.8%. Is now the time to buy Micron? Access our full analysis report here, it’s free.
- Memory Semiconductors company Seagate (NASDAQ: STX) jumped 4.6%. Is now the time to buy Seagate? Access our full analysis report here, it’s free.
Zooming In On Monolithic Power Systems (MPWR)
Monolithic Power Systems’s shares are extremely volatile and have had 34 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 8 days ago when the stock dropped 7.1% on the news that the chief executives of Anthropic, OpenAI, and SpaceX publicly united to call for a deliberate slowdown in the development of frontier AI models over escalating safety risks. According to CNBC, the sell-off was triggered by an essay published over the weekend by Anthropic CEO Dario Amodei, who urged a more cautious approach to frontier model advancement and called for independent safety monitoring. In a rare show of unity among competitors, the proposal was quickly endorsed by OpenAI CEO Sam Altman and SpaceX CEO Elon Musk. The unexpected warnings sparked immediate concern across the market regarding the sustainability of the heavy capital spending that has driven tech valuations higher. In response to the developments, Citigroup shifted to a neutral stance on broader equity risk, cautioning investors that any institutional pause or deceleration in AI deployments could temper corporate earnings growth and pressure chipmakers reliant on rapid, unchecked infrastructure expansion.
Monolithic Power Systems is up 48% since the beginning of the year, but at $1,385 per share, it is still trading 18% below its 52-week high of $1,690 from June 2026. Investors who bought $1,000 worth of Monolithic Power Systems’s shares 5 years ago would now be looking at an investment worth $2,727.
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