What Happened?
Shares of semiconductor designer Lattice Semiconductor (NASDAQ: LSCC) jumped 6.3% in the afternoon session after stocks rebounded (Nasdaq +2.0%, S&P 500 +1.5%) following a report from The Wall Street Journal stating that the Trump administration's reciprocal tariffs, to be announced on April 2, 2025, would be more narrowly targeted. The market reaction indicated that investors took that as a sign the economic impact of the tariffs, particularly on inflation and growth, might not be as bad as they initially feared.
That's a bit of a relief, which likely gave businesses and analysts some space to rethink their outlooks. Earlier, the administration had hinted at much broader tariffs that could have hit any country placing duties on U.S. imports, so this shift was likely a welcome surprise for the market.
The shares closed the day at $63.34, up 4.4% from previous close.
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What The Market Is Telling Us
Lattice Semiconductor’s shares are very volatile and have had 24 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 biggest move we wrote about over the last year was 8 months ago when the stock dropped 18.1% on the news that the company reported weak second-quarter earnings results. Its revenue and EPS both missed Wall Street's estimates.
Looking ahead, guidance for next quarter's revenue also missed analysts' expectations. The company called out industry headwinds, adding, "Second quarter 2024 results reflect the impact of cyclic industry headwinds. While the industry continues to go through a period of inventory normalization, we are starting to see signs of improvement. We continue to execute on our ongoing product portfolio expansion and remain well positioned for long-term growth."
Overall, this was a mediocre quarter for Lattice Semiconductor. Following the results, Bank of America analyst downgraded the stock's rating from Neutral to Underperform, citing "slowing growth prospects and muted visibility."
Lattice Semiconductor is up 13.3% since the beginning of the year, but at $63.40 per share, it is still trading 20.4% below its 52-week high of $79.63 from March 2024. Investors who bought $1,000 worth of Lattice Semiconductor’s shares 5 years ago would now be looking at an investment worth $3,849.
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