In This Article:
What Happened?
Shares of analog chips maker onsemi (NASDAQ:ON) fell 8% in the afternoon session after the company posted underwhelming results for the first quarter of 2025, with sales down 22% from the previous year. Each of its main business lines (power, analog, and sensing) saw big drops. Another concern was the big hit to profit margins due to write-downs on stock and factory assets. Even though sales tumbled, the firm still beat earnings forecasts. For next quarter, the company expects sales to stay flat (q/q) and margins to bounce back a little, though still far from last year's levels. All told, it was a weak quarter.
The shares closed the day at $38.38, down 8.4% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy onsemi? Access our full analysis report here, it’s free.
What The Market Is Telling Us
onsemi’s shares are extremely volatile and have had 30 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 biggest move we wrote about over the last year was 9 months ago when the stock gained 13.1% on the news that the company reported strong second quarter 2024 results that exceeded analysts' revenue, operating income, and EPS expectations.
On the other hand, its revenue guidance for next quarter missed analysts' expectations and its inventory levels increased. Overall, this was a mixed quarter for ON Semiconductor, but the market seemed to show some relief and focus on the positives.
onsemi is down 38.1% since the beginning of the year, and at $38.17 per share, it is trading 51.5% below its 52-week high of $78.74 from July 2024. Investors who bought $1,000 worth of onsemi’s shares 5 years ago would now be looking at an investment worth $2,519.
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