10 AI News Updates Making Waves on Wall Street

5. FormFactor, Inc. (NASDAQ:FORM)

Number of Hedge Fund Holders: 25

FormFactor, Inc. (NASDAQ:FORM) designs and manufactures testing and measurement systems for semiconductors, including probe cards, metrology systems, and thermal solutions.

On February 5, FormFactor (NASDAQ:FORM) reported Q4 non-GAAP EPS of $0.27 and revenue of $189.5 million, both missing estimates. According to management, the company’s results highlight contrasting market trends. The company benefited from strong growth in generative AI and high-bandwidth memory, which saw a 4x increase over 2023 and contributed $100 million in revenue. However, demand remained weak in high-volume segments such as client PCs and mobile handsets.

On February 6, B. Riley downgraded FormFactor (NASDAQ:FORM) to Neutral from Buy and reduced its price target to $34 from $64 after the company’s fourth-quarter results slightly missed expectations, while its first-quarter guidance came in weaker than expected. The firm pointed to sluggish demand for probe cards due to soft PC and smartphone markets, along with lower volumes impacting gross margins. Weakness in high-volume applications and Intel’s below-normal performance add to concerns, while new U.S. shipment restrictions are cutting China-related revenue by approximately $11 million quarter-over-quarter. The firm added:

“While progress on AMD-related qualifications could drive potential initial late-CY25 revenue and factors such as strong HBM share and cost control remain positives, confidence in near-to-intermediate-term revenue reacceleration and gross margin expansion has diminished. The urgency in pursuing new customers and cost reductions is evident, but further end-customer uncertainty leads us to implement a -20-25% CY25 and CY26 EPS cut from prior estimates. This creates a more opaque path to the target of $800M revenue, 48.0% gross margin, and $2.00 EPS.”