What Happened?
Shares of analog chips maker onsemi (NASDAQ:ON) jumped 5.3% in the afternoon session after chip stocks rallied to start the week as investor optimism rose following trade discussions between U.S. and Chinese officials in London.
Semiconductor companies have been among the hardest hit by the dispute, with key technologies subject to export controls. These restrictions have disrupted supply chains, creating uncertainty for both revenue growth and long-term planning.
Following the talks, investor sentiment rebounded on expectations that some of these constraints may soon be lifted. U.S. National Economic Council Director Kevin Hassett reinforced this outlook, "Our expectation is that ... immediately after the handshake, any export controls from the U.S. will be eased, and the rare earths will be released in volume, and then we can go back to negotiating smaller matters.".
After the initial pop the shares cooled down to $52.45, up 4.5% from previous close.
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What The Market Is Telling Us
onsemi’s shares are extremely volatile and have had 34 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 13 days ago when the stock gained 6.1% on the news that the major indices rebounded (Nasdaq +2.0%, S&P 500 +2.0%) as President Trump postponed the planned 50% tariff on European Union imports, shifting the start date to July 9, 2025. Companies with substantial business ties to Europe likely had some relief as the delay reduced near-term cost pressures and preserved cross-border demand.
onsemi is down 15% since the beginning of the year, and at $52.45 per share, it is trading 33.4% 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 $2,600.
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