What Happened?
Shares of semiconductor maker Himax Technologies (NASDAQ: HIMX) fell 9% in the morning session after its fourth-quarter 2025 earnings report revealed significant weakness despite beating revenue expectations.
While sales of $203.1 million surpassed Wall Street estimates, they marked a steep 14.4% decline from the same quarter last year. The underlying profitability painted a concerning picture, with earnings per share (EPS) falling to $0.04 from $0.14 a year ago. The company’s operating margin also compressed significantly, dropping to 3.4% from 9.7% in the prior year, highlighting reduced efficiency. Adding to investor worries, the company reported that its inventory levels had materially increased, which can be a sign of slowing demand. The combination of falling year-over-year sales, shrinking profitability, and rising inventory overshadowed the slight revenue beat, prompting a negative reaction from the market.
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What Is The Market Telling Us
Himax’s shares are very volatile and have had 29 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 23 days ago when the stock dropped 4.7% on the news that rising geopolitical tensions between the US and Europe over control of Greenland sparked a broad, risk-off mood in asset markets. The sell-off was fueled by President Trump's push for the U.S. to acquire Greenland, reviving fears of trade confrontations and new tariffs against European allies. The tech-heavy Nasdaq index saw significant declines, with the "Magnificent Seven" technology stocks, Nvidia, Apple, Alphabet, Amazon, Meta, Microsoft, and Tesla, all sliding to start the week. This widespread downturn among major tech players weighed heavily on the overall market as investors reacted to the escalating political rhetoric.
Himax is down 10.4% since the beginning of the year, and at $7.65 per share, it is trading 32.8% below its 52-week high of $11.38 from February 2025. Investors who bought $1,000 worth of Himax’s shares 5 years ago would now be looking at an investment worth $482.03.
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