What Happened?

Shares of analog chips maker onsemi (NASDAQ: ON) jumped 3% in the morning session after the semiconductor sector experienced a broad rally driven by continued investor enthusiasm for artificial intelligence (AI). The entire chip market appeared to benefit from the ongoing AI boom that defined much of the year. Reports highlighted robust demand for microchips, largely thanks to the bullish sentiment surrounding AI applications. This strong demand, coupled with predictions of soaring data center spending, created a promising outlook for the industry. Investors seemed to look beyond the largest players, anticipating that widespread AI investment would lift many other semiconductor companies as well.

After the initial pop the shares cooled down to $56.38, up 3% from previous close.

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What Is The Market Telling Us

onsemi’s shares are extremely volatile and have had 31 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 5 days ago when the stock gained 7.1% on the news that the company announced plans to collaborate with Innoscience to speed up the global rollout of its Gallium Nitride (GaN) power portfolio. The partnership combined onsemi's system and packaging expertise with Innoscience's high-volume GaN manufacturing capabilities. The goal was to accelerate the adoption of cost-effective and energy-efficient power devices for the industrial, automotive, telecom, and data center markets. Under the agreement, onsemi expected to begin sampling the new products in the first half of 2026. The stock's rise also occurred amid broader strength in the semiconductor sector.

onsemi is down 8.6% since the beginning of the year, and at $56.38 per share, it is trading 17.1% below its 52-week high of $67.97 from December 2024. Investors who bought $1,000 worth of onsemi’s shares 5 years ago would now be looking at an investment worth $1,796.

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