Alpha and Omega Semiconductor (NASDAQ:AOSL) dropped 3.09% to $40.43 as of 11:13 AM ET on Friday, reversing earlier gains. The decline follows a morning rally driven by news of the company securing a key supply deal with Nvidia (NASDAQ:NVDA) for the GB300 NVL72 AI server platform.

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The stock initially surged 6.35% to $44.37 at 10:30 AM ET after TF International Securities analyst Ming-Chi Kuo confirmed Alpha and Omega as the primary DrMOS supplier for Nvidia's AI servers, holding a 70% market share. However, after the initial surge, profit-taking and broader market trends appear to have pressured the stock into negative territory.

Despite the pullback, Kuo projected AOSL's 2025 revenue growth at 10% YoY, exceeding the 24% market consensus, and suggested the company could break even as early as Q2 2025, ahead of expectations. Alpha and Omega recently reported fiscal Q2 2025 earnings, with adjusted EPS of $0.09, slightly beating the $0.08 consensus, and revenue of $173.2 million, above the $170.1 million estimate.

This article first appeared on GuruFocus.

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