Key Highlights

● Cohu gapped down from $55.29 to $51.24 at the open on October 22.

● It slid to about $46.16 by early afternoon.

● The decline came without company-specific news.

● Teradyne, a larger peer, closed at $308.75, down $36.74.

Cohu (NASDAQ:COHU) sank on Thursday, October 22, 2026, as the rout in semiconductor-equipment stocks reached the small-cap end of the market. The stock, a member of the S&P SmallCap 600, gapped down at the open from $55.29 to $51.24, and slid further to about $46.16 by early afternoon.

The decline came without company-specific news. Cohu moved with the broader chip-equipment selloff.

Lam sets off the selling

The spark came from Lam Research (NASDAQ:LRCX), one of the world's largest makers of chip-manufacturing tools. Late on Wednesday, Lam reported record revenue of $8.22 billion, but its December-quarter revenue guidance of $8.6 billion, plus or minus $400 million, had a midpoint slightly below consensus.

Lam also warned that upstream parts shortages and certified clean-room constraints "continue to curb manufacturing velocity" and will persist into 2027. Lam's chief executive said the constraints would "limit chip makers and equipment companies' ability to fully meet end demand."

For equipment and test suppliers further down the chain, that raised the prospect that chip production could ramp more slowly than hoped, weighing on orders.

Test and handling names hit

As a test-equipment company, Cohu was in the group hit hardest on Thursday.

Teradyne (NASDAQ:TER), a larger chip-test peer, closed at $308.75, down $36.74, with no company news of its own. FormFactor (NASDAQ:FORM) tumbled, and Veeco Instruments (NASDAQ:VECO) also slid.

Among the larger equipment makers, Lam itself plunged, while KLA (NASDAQ:KLAC), Applied Materials (NASDAQ:AMAT) and ASML (NASDAQ:ASML) all fell sharply.

Meta adds to the pressure

The chip selloff was amplified by the results from Meta Platforms (NASDAQ:META) late Wednesday. Meta narrowed its 2026 capital expenditure range to $135 billion to $145 billion and reported negative free cash flow, which marked its first cash outflow in more than a decade. That raised questions about how long hyperscalers can keep spending at this pace.

"They are also getting worried if some of the AI spending is completely out of control with no real return," IBM (NYSE:IBM)'s chief executive said.

The broader market

The Philadelphia Semiconductor Index posted its biggest one-day drop since June 23, though it closed just above its 200-day moving average. The Nasdaq Composite fell 694.00 points to 26,008.86, its steepest decline since June 5, and the S&P 500 slid 93.74 points to 7,663.43, its worst day since July.

Small caps overall held up. The Russell 2000 edged up 3.01 points to 2,784.03, as investors rotated into consumer staples, health care, utilities and homebuilders. About two of every three S&P 500 stocks rose, according to market reports.

Treasuries rallied, sending the 10-year yield back below a closely watched threshold for the first time since September 22.

Volume was heavy across US exchanges, at 18.79 billion shares against a 20-session average of 17.19 billion, according to market data.

Cohu Awaits Teradyne's Read on Test Demand

For Cohu, the next read on the test-equipment cycle comes on October 27, when Teradyne reports earnings. Its commentary on demand and supply constraints will be watched closely by investors in smaller test names.

Big-tech earnings will also matter. Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) report on October 28, followed by Amazon (NASDAQ:AMZN) and Intel (NASDAQ:INTC) on October 29. Their spending plans will help determine whether chip production, and the demand for test equipment that goes with it, keeps growing into 2027.