Qnity Electronics Plunges 8.52% on Earnings, Margin Pressures Weigh Despite AI Growth

The share price fell to its lowest level since August 2017 today, with an intraday decline of 4.98%. Qnity Electronics (NYSE: Q) has now dropped 8.52% over three consecutive trading days, marking a significant reversal from its earlier 52-week high. The selloff follows a mix of strong earnings and guidance revisions, highlighting investor caution despite the company’s strategic alignment with AI-driven semiconductor demand.

The stock’s decline contrasts with Qnity’s third-quarter 2025 performance, which showed 11% year-over-year revenue growth to $1.275 billion, driven by AI applications, advanced packaging, and thermal management. However, adjusted EBITDA margins contracted to 29% from 30% in the prior year, attributed to unfavorable product mix, currency effects, and growth investments. While the firm raised full-year sales guidance to $4.7 billion, reflecting confidence in sustained AI infrastructure demand, the post-earnings drop suggests market skepticism about near-term margin stability or broader sector risks.

Qnity’s strategic focus on advanced semiconductor nodes and high-performance computing positions it to benefit from the industry’s ongoing recovery, fueled by AI and chipmaker capacity expansions. The company’s segments—Semiconductor Technologies and Interconnect Solutions—reported 8% and 15% revenue growth, respectively, underscoring its role in critical manufacturing workflows. Yet, the stock’s volatility underscores challenges in balancing aggressive investments with profitability. With the broader semiconductor sector facing macroeconomic uncertainties, Qnity’s ability to maintain its guidance while addressing margin pressures will likely dictate its near-term trajectory.