Arteris, Inc. (AIP) shares plunged 19.12% in pre-market trading on Wednesday, following the release of the company's disappointing second-quarter 2025 financial results. The significant drop comes just a day after the stock had surged on positive partnership news, highlighting the volatile nature of investor sentiment in the semiconductor industry.

The semiconductor IP provider reported an adjusted loss per share of $0.11 for the second quarter, missing analysts' expectations of $0.10. While Arteris managed to grow its revenue by 13% year-over-year to $16.5 million, slightly beating the consensus estimate of $16.35 million, the earnings miss appears to have overshadowed this modest top-line growth. Adding to investor concerns, the company provided revenue guidance for the third quarter in the range of $16.8 million to $17.2 million, falling short of the consensus estimate of $17.25 million.

The stark contrast between Tuesday's performance, where Arteris shares soared 37.6% on news of a partnership with AMD, and Wednesday's pre-market plunge underscores the market's complex reaction to mixed news from the company. While the AMD partnership initially excited investors, the focus has now shifted to Arteris' current financial performance and near-term outlook. This shift in focus has led to a significant sell-off, erasing the previous day's gains and then some, as traders reassess the company's short-term prospects in light of the earnings miss and weak guidance.