MaxLinear (MXL) shares tumbled 10.57% over the past 24 hours in Thursday trading, erasing a chunk of the steep gains accumulated in the sessions leading up to its second-quarter earnings release. The sell-off came despite the company reporting results that topped Wall Street forecasts and issuing a much stronger-than-expected revenue outlook for the third quarter.

The decline followed a powerful three-day rally that saw the stock surge 7.95%, 5.43%, and 7.93% in the prior sessions as investor optimism around robust earnings expectations was fully priced in. With the earnings catalyst now realized and significant short-term profits on the table, concentrated selling pressure emerged as traders locked in gains. Compounding the profit-taking, valuation concerns added to the downward momentum: Wall Street’s median 12-month price target for MaxLinear sits at $67, well below its recent closing price above $86, while the stock traded at a lofty 52 times forward earnings.

MaxLinear reported second-quarter revenue of $168.85 million, beating the $164.7 million consensus estimate, and adjusted earnings per share of $0.35, above the $0.33 estimate. The company guided for third-quarter revenue between $210 million and $220 million, far exceeding the Street’s $173.8 million view, driven by accelerating demand in its optical AI data center business. However, the strong fundamental news was not enough to counteract the weight of pre-report buying and a stretched valuation, resulting in the sharpest 24-hour pullback in recent memory.