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ON Semiconductor (NASDAQ:ON) just posted a stronger-than-expected Q2 outlook, but the market wasn't impressed. Shares dropped 8.2% at 12.24pm today, after the chipmaker forecasted $1.40$1.50 billion in revenue, landing above Wall Street's $1.42 billion estimate. Demand for its silicon carbide chipscrucial to EVsremains resilient, particularly in China and Europe. That strength comes even as automakers brace for the fallout from Trump's new 25% tariff on imported cars, which could raise sticker prices by thousands and scramble global supply chains.
So why the sell-off? Onsemi's Q1 revenue dropped 22% year-over-year. That, coupled with its scrapped $6.9 billion offer for Allegro MicroSystems (NASDAQ:ALGM), and a looming 2,400-person layoff in 2025, seems to have shaken investor confidence. Even though adjusted EPS guidance for Q2 came in at 4858 cents (roughly in line with consensus), it wasn't enough to reset the narrative. The market is clearly asking: where's the growth spark going to come from next?
From a technical standpoint, the stock just broke key support around $65, triggering a sharp leg down. Momentum's oversold, but we haven't seen a clear reversal yet. If you're bullish on long-term EV trends, this might be a spot to start nibblingas long as it holds the $60 level.
This article first appeared on GuruFocus.