What Happened?
Shares of semiconductor designer Lattice Semiconductor (NASDAQ: LSCC) jumped 5.1% in the afternoon session after the chip sector rallied on hopes for a potential interest rate cut in September.
The rally in semiconductor stocks was sparked by comments from Federal Reserve Chair Jerome Powell, who signaled a potential interest rate cut in September. This prospect of lower borrowing costs boosted investor sentiment and triggered broad buying across the technology sector, including AI chipmakers and equipment manufacturers. Lattice was not alone in its ascent; other companies in the chip industry, such as NXP Semiconductors, GlobalFoundries, and STMicroelectronics, also experienced gains of around 5% as the entire sector responded positively to the macroeconomic news.
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What Is The Market Telling Us
Lattice Semiconductor’s shares are very volatile and have had 27 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 9 days ago when the stock gained 3.5% on the news that the semiconductor sector continued to rally as a favorable July inflation report boosted investor confidence for a potential Federal Reserve interest rate cut in September. Lower-than-expected inflation data for July increased market expectations for a Federal Reserve interest rate cut next month, with futures markets pricing in a 96.2% probability. A potential rate cut lowers borrowing costs, which is particularly beneficial for growth-oriented sectors like technology and semiconductors as it can fuel investment and expansion.
Lattice Semiconductor is up 15.8% since the beginning of the year, and at $64.77 per share, it is trading close to its 52-week high of $68.78 from February 2025. Investors who bought $1,000 worth of Lattice Semiconductor’s shares 5 years ago would now be looking at an investment worth $2,217.
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