What happened

Shares of Ultra Clean Holdings (NASDAQ:UCTT) gained 138% in 2017, according to data from S&P Global Market Intelligence. The maker of manufacturing and testing tools, used in the clean rooms of semiconductor makers, beat Wall Street's earnings targets in three out of four quarterly reports last year. In the final report, Ultra Clean fell a bit short.

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Image source: Getty Images.

So what

Coming into 2017, Ultra Clean's sales and profits had been dwindling for a few years. An expanded product line meshed perfectly with a sudden spark of high demand for chipbuilding equipment, and the company had a banner year as a result:

UCTT Revenue (TTM) Chart

UCTT Revenue (TTM) data by YCharts

Now what

It wasn't a year of absolute perfection, and Ultra Clean's lone earnings miss came in October's third-quarter report. Share prices plunged 24% the next day, taking the edge off of the stock's rampant growth in a hurry. The market momentum did not rebuild on its own, and the stock is staying more than 20% below early October's all-time highs.

The next earnings report is due in the second half of February, and it could either light a new fire under the stock or take it down again. To get some clues on what to expect, keep an eye on Ultra Clean's clients -- the major chip companies of the world -- as they present their results in the meantime. Strong reports and large capital expense budgets in that sector would be good tidings for Ultra Clean.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.