What Happened?
Shares of analog chips maker onsemi (NASDAQ: ON) jumped 4.9% in the morning session after a wave of positive sentiment boosted the semiconductor sector as chip giant Nvidia announced a major partnership with Intel.
The industry-wide rally ignited when Nvidia revealed it was investing $5 billion into rival Intel. The two companies teamed up to work on custom data centers for artificial intelligence and new personal computer products. This news sent shockwaves through the market, causing Intel's shares to surge.
Adding a unique twist to the day's events, onsemi received an unexpected endorsement from FBI Director Kash Patel during congressional testimony. He called the company a "good investment," which reportedly caused the stock to jump within minutes of his comment, adding to the upward momentum.
After the initial pop the shares cooled down to $52.17, up 4.8% from previous close.
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What Is The Market Telling Us
onsemi’s shares are very volatile and have had 29 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 16 days ago when the stock dropped 3% on the news that the major indices continued to retreat (Nasdaq -1.5%, S&P 500 -1.2%) amid profit-taking and renewed concerns about tariffs.
Investors reacted to a federal court ruling that most of President Trump's global tariffs were illegal, raising uncertainty over trade policy and the fiscal impact of potential refunds. Rising Treasury yields added to the pressure, with the 10-year climbing above 4.2% and the 30-year nearing 5%, intensifying worries about stretched equity valuations. September's historically weak track record for stocks further dampened sentiment, leaving traders cautious ahead of the jobs report later in the week and the Federal Reserve's upcoming rate decision.
onsemi is down 15.5% since the beginning of the year, and at $52.17 per share, it is trading 30.2% 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 $2,436.
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