Nova Signals a Slowdown Ahead for the Semiconductor Industry

9 November, 2025

Revenues surged 25% to a record $224.6 million, but Nova cautions that chip industry growth in 2026 will slow to a mid-single-digit pace

Nova Ltd. (NASDAQ: NVMI) reported record third-quarter results with a 25% revenue jump to $224.6 million, but the company cautioned that 2026 growth across the semiconductor industry is likely to be “mid-single-digit,” following a year of AI-driven expansion.

The metrology and process control company once again beat analyst estimates, posting non-GAAP earnings of $2.16 per share, a gross margin of 59%, and $67 million in free cash flow. It was Nova’s sixth consecutive record quarter, though the streak may plateau in Q4 2025, with revenue guidance of $215–225 million. The stock fell more than 8% on Nasdaq after the earnings release.

CEO Gaby Weissman attributed the strong results to a rebound in the memory and logic markets—particularly demand for DRAM and HBM chips—alongside growing adoption of Gate-All-Around transistors and advanced packaging technologies.

Nova also expanded its manufacturing footprint with a new facility in Mannheim, Germany, tripling its optical-metrology production capacity. “2025 will mark an all-time-high year for Nova,” Weissman told investors. “Looking ahead to 2026, we expect continued growth, fueled by advanced logic, packaging, and DRAM momentum.”

At the same time, Weissman tempered the market’s exuberance surrounding the global chip boom, noting that Nova anticipates “mid-single-digit” growth in wafer-fab equipment (WFE) spending next year—a more moderate pace than in 2025. “We see WFE growth in the mid-single-digit range,” he said, “with potential upside as AI-driven demand trickles down the supply chain and boosts fab utilization.”

Given Nova’s position at the heart of advanced semiconductor manufacturing, this outlook is viewed as a subtle warning signal for the broader sector. After months of excitement around AI-related investment and new fab construction, Nova suggests that the industry is stabilizing—and that 2025’s rapid acceleration may not repeat at the same clip next year.

The company added that activity in China “normalized” in the second half of the year, with nominal revenue slightly above last year’s level, though the region’s share of total sales declined from 39% to about 30%, reflecting volatility and ongoing export-control uncertainty.

Still, Weissman expressed confidence in Nova’s ability to outgrow the market: “We believe we have the right growth engines and the execution to outperform industry expansion,” he said, pointing to core segments such as advanced packaging, materials, and memory as strategic growth pillars for the coming years.

In sum, Nova continues to demonstrate operational strength and technological leadership—but its CEO’s remarks are a reminder that even in the AI era, the semiconductor market remains cyclical and sensitive. Nova’s report may serve not just as an earnings update, but as an early temperature check for the entire industry.

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