Yahoo Finance Why Is ON Semiconductor (ON) Stock Rocketing Higher Today
What Happened:
Shares of analog chips maker ON Semiconductor (NASDAQ:ON) jumped 13.1% in the morning session after the company reported second quarter earnings 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.
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What is the market telling us:
ON Semiconductor's shares are somewhat volatile and over the last year have had 10 moves greater than 5%. But moves this big are very rare even for ON Semiconductor and that is indicating to us that this news had a significant impact on the market's perception of the business.
The biggest move we wrote about over the last year was 6 months ago, when the stock gained 8.7% on the news that the company reported fourth-quarter results, with revenue and EPS exceeding analysts' expectations. Management cited "record automotive revenue and 4x year-over-year growth in silicon carbide revenue."
During the Q3'2023 earnings call, the company highlighted the potential in the silicon carbide business, where it commands more than 25% market share. In addition, it expected growth in the silicon carbide business to double market growth in 2024.
On the other hand, its revenue guidance for the next quarter missed analysts' expectations, and its inventory levels increased amid "uncertain market conditions."
Overall, this was a mixed quarter for ON Semiconductor, but the market was likely relieved that the results were not worse.
ON Semiconductor is down 3.1% since the beginning of the year, and at $79.18 per share it is trading 26.7% below its 52-week high of $108.09 from July 2023. Investors who bought $1,000 worth of ON Semiconductor's shares 5 years ago would now be looking at an investment worth $3,553.
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