Should You Buy, Sell or Hold Nova Stock After a 28% Dip in 3 Months?

Nova Ltd. NVMI shares have lost 27.9% in the past three months, underperforming the Zacks Electronics – Semiconductors industry’s return of 2.7%, and the Zacks Computer and Technology sector and the S&P 500 index’s decline of 1.6% and 1.3%, respectively. 

NVMI shares have also underperformed industry peers, including Applied Materials AMAT, Cirrus Logic CRUS and FormFactor FORM. In the past three months, shares of Applied Materials, Cirrus Logic and FormFactor have lost 1.9%, 2.5% and 7.8%, respectively.

Due to the new tariffs imposed, the company guided a reduction of gross margins by 30 to 50 basis points in the second quarter of 2025. The guidance by the company and potential impacts of the international trade climate on NVMI may have weighed on investor sentiments, thus leading to the underperformance. However, the company is well-positioned to mitigate these challenges in the long term. Let’s delve deeper to understand why Nova offers a compelling investment opportunity in 2025.

How NVMI is Set to Tackle Macroeconomic Uncertainties

Despite ongoing trade tensions, NVMI remains on strong footing. The company expects steady business momentum in the second quarter, with no major shifts in customer demand so far. The company is working closely with clients to stay flexible and responsive. Even with new tariffs, the impact on gross margins is limited, and there's no current effect on revenue growth.

Nova Ltd. Price and Consensus

Nova Ltd. price-consensus-chart | Nova Ltd. Quote

NVMI’s global manufacturing footprint is a key strength. With production in the United States, Germany and Israel, the company can adapt quickly to shifting trade rules. Most of its supply chain is localized, reducing tariff exposure. While service parts face some cost pressure, NVMI is exploring pricing and operational changes to stay ahead. This smart positioning keeps the company resilient and opportunity-ready.

NVMI’s Strong Financial Performance and Milestones

NVMI's market share has grown significantly in the thin-film and OCD metrology segment, making it the second-largest vendor in this space. This growth has been supported by strong demand in semiconductor manufacturing, especially for AI applications. As chipmakers expand capacity worldwide, the company's unique solutions continue to drive solid revenue performance across key technology nodes.

The company saw record revenues in the first quarter of 2025 from its gate-all-around and advanced packaging technologies. This includes standout sales of the PRISM platform, PRISM’s spectral interferometry and algorithmic strengths support advanced applications like hybrid bonding, helping customers improve process control and production quality.

Nova also achieved record sales in integrated metrology and software solutions. Two gate-all-around manufacturers adopted the integrated tools, with one also using them for packaging. The software division performed strongly, as customers used its machine learning capabilities to cut costs and address complex manufacturing challenges, especially in high-value, advanced packaging processes.

NVMI’s Earnings Estimate Revisions Show Upward Trend

The Zacks Consensus Estimate for NVMI’s 2025 earnings is currently pegged at $7.83 per share, which has been revised upward by 3.57% over the past 30 days. The estimate indicates year-over-year growth of 30.07%. 

The consensus mark for revenues is pegged at $863.7 million, indicating a year-over-year increase of 28.45%.

NVMI beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, with the average surprise being 12.19%.

Here’s Why You Should Buy NVMI Stock Now

Nova continues to deliver strong results with consistent quarterly growth and rising demand across key technologies. The company’s role in supporting AI-driven semiconductor manufacturing is expanding, and the successful integration of Sentronics adds further momentum. Its production facilities across the United States, Germany and Israel offer flexibility in a shifting global trade environment. NVMI’s financial health remains solid, supported by strong cash reserves and disciplined execution. With steady customer demand and a growing portfolio of advanced solutions, NVMI is well-positioned to navigate uncertainty. Hence, investors looking for long-term growth potential should consider buying the stock now. 

NVMI currently carries a Zacks Rank #2 (Buy) and has a Growth Score of A, a favorable combination that offers a strong investment opportunity, per the Zacks proprietary methodology. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research