onsemi (ON) Stock Trades Up, Here Is Why

What Happened?

Shares of analog chips maker onsemi (NASDAQ:ON) jumped 4.8% in the afternoon session after a broad rally in the semiconductor sector pushed the Philadelphia Semiconductor Index to an all-time high. The move was part of a wider market rebound driven by tech stocks, as investor optimism lifted the chip industry. The Philadelphia Semiconductor Index, a key benchmark for chipmakers, gained as much as 2.2% during the session. The positive sentiment was widespread across the industry, with other companies like Micron and KLA also experiencing significant gains. This broad upswing in the sector appeared to be fueled by continued optimism around artificial intelligence (AI) technologies.

After the initial pop the shares cooled down and closed the day at $54.88, up 4.5% from previous close.

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What Is The Market Telling Us

onsemi’s shares are extremely volatile and have had 31 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 7 days ago when the stock gained 9.9% on the news that positive sentiment swept through the semiconductor industry as Broadcom announced a partnership with OpenAI to develop custom AI accelerators. The news lifted shares of fellow chipmakers, including onsemi. The collaboration between Broadcom and the creator of ChatGPT caused a rally across the sector, with investors showing renewed optimism about the demand for artificial intelligence hardware. Contributing to the positive mood, investor fears also seemed to ease after a more conciliatory tone regarding trade relations between the U.S. and China emerged, helping chip stocks rebound from a selloff during the previous trading session.

onsemi is down 10.8% since the beginning of the year, and at $55.06 per share, it is trading 26.3% below its 52-week high of $74.70 from October 2024. Investors who bought $1,000 worth of onsemi’s shares 5 years ago would now be looking at an investment worth $2,110.

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