Nvidia Signed a $1.5 Billion Deal With This Chip Stock. Then the Stock Crashed 25%

Nvidia Corporation (NASDAQ:NVDA) handed Amkor Technology, Inc. (NASDAQ:AMKR) a massive vote of confidence on July 23. The companies announced a $1.5 billion multi-year advanced packaging and development agreement, with Nvidia Corporation (NASDAQ:NVDA) committing a prepayment to support Amkor’s U.S. advanced packaging capacity. Five days later, the stock plunged almost 25% in a single session.

Nvidia Is Backing Amkor’s U.S. Packaging Buildout

Nvidia and Amkor will work on advanced packaging and test technologies for next-generation AI and accelerated computing systems, including high-density interconnects and heterogeneous integration.

The agreement supports Amkor’s expansion in Arizona, where the company is building a major U.S. advanced packaging campus. As AI chips become more complex, packaging becomes a larger part of the manufacturing challenge, especially for systems combining multiple dies, memory and advanced interconnects.

Amkor’s results are already moving in the right direction, as Q2 sales rose 26% year over year to a record $1.90 billion, with record revenue in Computing as well as Automotive & Industrial. Gross margin improved to 16.8% from 12.0% a year earlier, and diluted EPS reached $0.70.

Wall Street Hated the Near-Term Setup

After the July 27 earnings report, investors punished the stock as Q3…