Amkor shares dive after Q2 beat as chip rout deepens
AMKR•Shares fall despite earnings beat
Semiconductor packaging provider Amkor Technology's AMKR.O shares dive 23.8% to $46.24 on Tuesday despite Q2 results that topped Wall Street's expectations as chip names globally continue to sell off.
AMKR is on course for its steepest daily percentage decline since the onset of the pandemic in March 2020, as the Philadelphia SE Semiconductor index .SOX drops more than 6% amid concerns about hefty corporate outlays and rising Chinese competition biting AI chip stocks.
Quarterly results and guidance backdrop
Amkor late Monday said Q2 revenue grew 26% year over year to $1.9 billion and posted adjusted EPS of 70 cents, both above LSEG estimates of $1.81 billion and 48 cents per share, respectively.
CEO Kevin Engel cited record revenue in the company's Computing and Automotive and Industrial end markets.
Reacting to the report, Morgan Stanley raised its price target to $70 from $69, while B. Riley reduced its target to $65 from $75. The average rating of 12 analysts covering AMKR stock is hold; median price target is $70.
The stock had gained about 54% year to date ahead of results.
Recent packaging deals with Nvidia and TSMC
On Thursday, Amkor struck a multi-year, $1.5 billion deal with Nvidia NVDA.O to expand advanced chip packaging and test capacity in the U.S., after entering an 11-year partnership with TSMC 2330.TW last month.
