AMKR Stock: Why Amkor Tanked After Outstanding Earnings

Amkor Technology [AMKR] is one of the world’s largest outsourced semiconductor assembly and test (OSAT) providers.

Its core business is helping chipmakers package, assemble and test their products before they reach end markets. As such, it has positioned itself as a key player in the artificial intelligence (AI) infrastructure supply chain.

In light of this, you might say, the stock must be beloved of tech investors everywhere, as a classic second-order, ‘picks and shovels’ play on the booming AI space, like Penguin Solutions [PENG] or Seagate [STX].

AMKR stock has certainly performed in a similar manner to other such stocks over the last 12 months. After an initial surge of enthusiasm for first-order AI firms following the launch of ChatGPT, investors began to explore companies that provided the infrastructure that enables the big chipmakers to make their chips.

Amkor began to climb around September 2025, hitting an all-time high at the end of June. 

Since that moment, however, there has been something of a sea change. Talk of an AI bubble has become increasingly pervasive, and investors seem less and less convinced that vast AI capex is a guarantee of imminent earnings.

In recent days, Nvidia [NVDA] has ceded its position as the world’s most valuable public company to Apple [AAPL] – that’s right, Apple, the same company that only a few months ago analysts were writing off as the laggard in the AI race, and lampooning for consistently lowering its AI capex.  

Well, Apple is up 25% year-to-date, while Nvidia has risen a trifling 5%.

This, then, was the key context behind the response to Amkor’s earnings on Monday 27 July. Had they landed even two weeks earlier, things might have been different. As it was, the numbers were not enough to distract investors from a somewhat lukewarm outlook and the promise of huge capex. 

They voted with their feet. The firm lost almost a quarter of its market value in a single session, falling 24.7%.

Before we dive into the numbers, though, it’s important to take account of a development that immediately preceded their release.

Nvidia announcement prompts surge, then sell-off

On 23 July, Amkor announced a multiyear agreement with Nvidia worth up to $1.5bn to expand advanced semiconductor packaging and testing capacity in the US, with much of the investment focused on its Arizona operations. The deal reinforces Amkor’s role in Nvidia’s AI supply chain and highlights the growing strategic importance of advanced packaging as demand for high-performance chips continues to accelerate.

One imagines the announcement was timed to spark a surge of momentum that would only be extended by the outstanding earnings report.

Indeed, the news precipitated a sharp rally in Amkor shares during extended trading as investors welcomed the scale of the agreement and its long-term growth implications. However, that initial surge also left the stock vulnerable to profit-taking once the excitement subsided. 

Many traders appeared reluctant to hold onto a stock that had already enjoyed a strong run, opting instead to lock in gains before results despite the positive long-term outlook. Amkor lost some 8.8% in the run-up to earnings – the exact opposite of what the company likely intended.

Q2 profits and margins climb

Revenue reached $1.9bn, up 26% year-on-year, as the company saw broad-based growth across computing, automotive and industrial markets. Earnings per share rose to $0.70, supported by stronger utilisation rates and improved profitability, while net income reached $174m.

Profitability also improved significantly during the quarter. Gross margin expanded by more than 250 basis points sequentially to 16.8%, while EBITDA reached $400m, representing a 21% margin. Operating income came in at $200m, with an operating margin of 10.5%. Amkor ended the quarter with $2.5bn in cash and short-term investments, alongside $2.5bn of debt, resulting in a manageable debt-to-EBITDA ratio of 1.8.

Looking ahead, management expects continued momentum in Q3, forecasting revenue of between $1.95bn and $2.05bn. Gross margins are expected to improve further to between 18.5% and 19.5%, with net income projected at $180m to $205m and EPS of $0.72 to $0.82. The company also plans significant investment in future capacity, with 2026 capital expenditure expected to reach between $2.5bn and $3bn.

Amkor’s long-term outlook has been strengthened by strategic partnerships with Taiwan Semiconductor Manufacturing Co [TSM] and Nvidia, supporting its position in advanced packaging technologies. However, near-term challenges remain. Communications demand is expected to weaken in Q3 due to memory supply constraints and changing customer strategies, while Android-related revenue declined 20% during the quarter. The transition of system-in-package production to Vietnam is also creating temporary disruptions, which could weigh on performance into the first half of next year. Additionally, underutilised US manufacturing capacity and rising operating expenses could pressure margins as Amkor continues investing for future growth.

Testing times: AMKR vs ASX vs KLIC

Let’s see how Amkor lines up against two competitors in the space.

ASE Technology Holding [ASX] is the world’s largest OSAT provider, with unmatched scale across packaging, testing and electronic manufacturing services. The company continues to benefit from surging AI demand, particularly for advanced packaging, and its latest results highlighted robust growth in its high-margin packaging business. Ongoing investment in its LEAP platform should reinforce its leadership in cutting-edge chip packaging.

ASX stock is up more than 111% year-to-date, but, like Amkor, has been declining precipitously in recent weeks.

Kulicke and Soffa Industries [KLIC] supplies the equipment used to assemble and package semiconductors, rather than providing packaging services directly. The company is increasingly exposed to advanced packaging and AI-related demand through its thermocompression bonding and hybrid bonding technologies. Recent quarters have shown improving order trends as customers resume investment in advanced packaging capacity after a prolonged industry downturn.

Subscribers can read our deep dive into KLIC stock on the CMC Aureon Substack channel, Foresight.

Here go the respective numbers. 

Source: Yahoo Finance

Notwithstanding the ongoing correction, all three stocks stand to benefit from the growing importance of advanced semiconductor packaging, but they occupy different parts of the value chain. ASE is the dominant OSAT provider, combining scale with strong profitability and broad exposure to AI infrastructure spending. Amkor has carved out a differentiated position through partnerships with Nvidia and TSMC, expanding US-based advanced packaging capacity as chip production is reshored. Kulicke and Soffa provides the equipment that enables these packaging advances, offering investors a more indirect way to participate in the same structural trend. 

Conclusion: The investment case for AMKR stock

Amkor’s post-earnings collapse underlines an old market lesson: great results do not always make for a great stock reaction. 

Despite record revenue, expanding margins and a landmark Nvidia agreement, investors focused instead on softer communications demand, heavy capital spending and the risk that AI infrastructure investment may be peaking after a remarkable run. 

For bulls, Amkor remains one of the best-positioned pure-play beneficiaries of advanced semiconductor packaging, with deep relationships across the AI ecosystem and clear long-term demand drivers. Bears, meanwhile, will point to execution risks, cyclical end markets and rising investment costs. Both parties will be watching closely to see whether Amkor can pare losses and resume its climb.

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