MACOM and Allegro MicroSystems Stocks Trade Up, What You Need To Know

What Happened?

A number of stocks jumped in the afternoon session after the semiconductor sector rallied as a bullish revenue forecast from memory-chip maker Micron Technology helped reignite investor enthusiasm for the AI-driven market. 

Shares of Micron soared over 11% after the company issued a sales outlook that surpassed analysts' estimates, pointing to robust demand for its chips, which are crucial for AI hardware. 

As a bellwether for the industry, Micron's optimistic outlook is seen as a positive signal for the entire semiconductor ecosystem. Management cited improving demand conditions and tighter supply, suggesting strong pricing power. This news helped reverse recent slides in AI-related stocks and lifted the broader semiconductor sector, reinforcing the narrative of sustained growth fueled by the expansion of artificial intelligence.

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:

• Analog Semiconductors company MACOM (NASDAQ:MTSI) jumped 3.3%. Is now the time to buy MACOM? Access our full analysis report here, it’s free for active Edge members.
• Processors and Graphics Chips company Allegro MicroSystems (NASDAQ:ALGM) jumped 3.7%. Is now the time to buy Allegro MicroSystems? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Allegro MicroSystems (ALGM)

Allegro MicroSystems’s shares are extremely volatile and have had 30 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 7 days ago when the stock dropped 3.1% as reports revealed that China is moving to substitute US technology by adding domestic AI chips to its government procurement list. 

This development is part of a broader "buy local" campaign aimed at reducing China's reliance on foreign technology, particularly from the United States, amid persistent trade and tech tensions. The Chinese government has updated its guidelines to include AI chips from homegrown companies like Huawei and Cambricon. This policy shift effectively steers government and state-affiliated buyers away from American semiconductor firms. For US chipmakers, this signals a potential loss of market share in one of the world's largest tech markets, raising concerns among investors about future revenue streams from the region.

Allegro MicroSystems is up 16.6% since the beginning of the year, but at $26.59 per share, it is still trading 29.1% below its 52-week high of $37.51 from July 2025. Investors who bought $1,000 worth of Allegro MicroSystems’s shares 5 years ago would now be looking at an investment worth $1,049.

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