While these attributes clearly have positive implications, economic realities could hurt ON and other chip stocks. Our leadership in the accelerating megatrends of vehicle electrification, ADAS (advanced driver-assistance systems), energy infrastructure and factory automation have enabled us to extend long-term supply agreements and increase demand visibility. Still, the irony for chip stocks is that while Onsemi posted very encouraging results for its underlying sector, ON stock is down about 5% in early afternoon trading, reflecting forward-looking concerns about the semiconductor space.Ĭhip Stocks Face an Ecosystem Fraught With Riskįor Onsemi, in addition to good ole fashioned profit-taking, Wall Street could have responded to the read-between-the-lines dynamic that its Q2 report presented.

Per Investor’s Business Daily, ON earnings jumped 113% while sales climbed 25% on a year-over-year (YOY) basis. Covering analysts anticipated that ON stock would post adjusted EPS of $1.25 on sales of $2.01 billion. The tech firm delivered adjusted earnings per share of $1.34 on revenue of $2.09 billion. Second, chip stocks generally received buoyant trading action stemming from Onsemi’s robust second-quarter earnings performance. Perhaps most importantly, amid a rancorous political environment, the CHIPS Act provided a rare opportunity for bipartisanship. First, the CHIPS and Science Act could represent a seminal moment for economic stability, potentially addressing supply chain vulnerabilities for semiconductor production as well as reinvigorating scientific research and maintaining broader U.S. Two major developments undergird chip stocks at the present juncture. While not every company has benefitted from the development, shares of Advanced Micro Devices (NASDAQ: AMD), Nvidia (NASDAQ: NVDA), Taiwan Semiconductor (NYSE: TSM) and ON Semiconductor (NASDAQ: ON) have captured investors’ attention.

With President Joe Biden expected to sign a spending bill designed to bolster the domestic semiconductor industry in light of the Covid-19 pandemic’s supply chain disruptions, several chip stocks have grabbed the spotlight to start the month of August.

Pre market quote nvda