Camtek Stock Tanks: Here’s Why Investors Are Running for the Exits

Semiconductor darling Camtek just got slapped by the market—hard. Shares cratered this week as Wall Street's algo-trading overlords decided the party's over. Let's break down the bloodbath.

The Selloff Trigger: Growth Fears or Just Profit-Taking?

No dramatic earnings miss or scandal here. Just good old-fashioned panic as institutional investors rotated out of tech. The stock had been riding high on AI hype—maybe too high for the suits who actually read balance sheets.

Semiconductor Sector Jitters Hit Hard

Camtek got caught in the broader chip sector downdraft. When the big players sneeze, smaller specialists like Camtek catch pneumonia. Classic case of 'when the tide goes out, you see who's swimming naked.'

Funny how these 'smart money' types always discover valuation concerns after booking their profits. The stock will bounce back—just in time for the next round of hedge fund bonus season.

Good, but not good enough

For its second quarter, Camtek notched a new all-time high revenue figure of just over $123 million. This was 20% higher year over year. Non-GAAP (adjusted) net income ROSE at nearly the same pace, advancing 19% to almost $39 million, or $0.79 per share.

Image source: Getty Images.

Camtek operates in the semiconductor industry, which has seen considerable investor interest on the back of the relentless growth of artificial intelligence (AI) functionalities. In light of that, the market likely found it disappointing that the company only met the average analyst estimate for adjusted profitability while scoring a slight beat on the consensus revenue projection of just under $122 million.

In its earnings release, Camtek said it is focused on AI, with its advanced packaging segment in particular gearing to service components used in the technology. In management's view, the stepped-up computing power requirements for AI should spur demand for the company's inspection and measuring tools.

Double-digit increase expected for the third quarter

Camtek also published rather spare guidance for its current (third) quarter. It's expecting to earn $125 million for the period, which if achieved WOULD represent year-over-year growth of 11%. The fact that this figure is well below that of the second quarter was probably worrying to more than a few of the company's investors.