Latest news with #ONSemiconductor
CNBC
5 days ago
- Business
- CNBC
What is wrong with chip stocks this earnings season?
AMD shares tumbled Tuesday despite solid revenue guidance and AI chip optimism, becoming the latest semiconductor casualty in a market where solid execution simply isn't enough. This earnings season has been brutal for chip stocks: Texas Instruments , ON Semiconductor , Qualcomm , and Arm all posted results that looked good on paper, but were met with steep sell-offs as investors demanded accelerating growth and guidance that clears an ever higher bar. SOXX 1M mountain iShares Semiconductor ETF, 1 month Even Lattice Semiconductor wasn't spared. Management outlined a confident AI roadmap and said new product sales could could hit the high teens as a percentage of total revenue in 2025 - implying 70% year-over-year growth. But the numbers merely matched expectations and that was reason enough to sell. We've reached a point where 70% growth isn't good enough. The message is clear: guidance matters more than headline beats. Especially in AI, where expectations have soared and valuation premiums demand more than just "good". AMD, up over 40% this year, faced that reality. After such a run, decent numbers don't move the needle. Only blowouts do. SOXX YTD mountain iShares Semiconductor ETF, YTD With the PHLX Semiconductor index posting back-to-back weekly losses for the first time since March, chip investors are only rewarding the stocks that can deliver the most dramatic guidance surprises. With chip stocks up nearly 60% as a group off their lows in April during the global trade war scare, it also means maybe share prices for this sector are too far ahead of themselves. The next test will be Nvidia's earnings on Aug. 27.
Globe and Mail
5 days ago
- Business
- Globe and Mail
Taiwan Semiconductor Stock Soars 18% YTD: Time to Hold or Book Profit?
Taiwan Semiconductor Manufacturing Company TSM, also known as TSMC, has made a remarkable run so far this year despite high market volatility amid ongoing macroeconomic uncertainties and geopolitical issues. The stock has delivered a solid 17.7% gain year to date (YTD) and outperformed the broader Zacks Computer and Technology sector, which rose 10.9%. Taiwan Semiconductor stock has also moved ahead of several chip peers, including ASML Holding ASML, ON Semiconductor ON and Marvell Technology MRVL. Shares of ASML Holding, ON Semiconductor and Marvell Technology have fallen 0.5%, 25.1% and 30.6%, respectively, YTD. YTD Price Return Performance This outperformance shows investors remain confident in Taiwan Semiconductor's long-term story, even during a volatile market shaped by trade conflicts and geopolitical risks. We believe this momentum is grounded in strong fundamentals, and TSM's long-term outlook justifies a hold position for now. AI Boom: A Multi-Year Growth Catalyst for TSM Taiwan Semiconductor continues to dominate the semiconductor foundry space. TSMC is known for its advanced production capabilities and has already moved into 3nm production, with 2nm coming soon. Its large scale allows it to handle rising AI chip demand better than most competitors. The ongoing artificial intelligence (AI) boom has placed TSMC at the center of a multi-year structural growth cycle. Taiwan Semiconductor has established itself as the preferred manufacturing partner for AI accelerators, including graphics processing units (GPUs) and custom silicon developed by major players like NVIDIA, Marvell Technology and Broadcom. In 2024, AI-related revenues tripled, making up a mid-teen percentage of Taiwan Semiconductor Manufacturing's total revenues, and the momentum is far from over. TSMC expects AI-related sales to double again in 2025, with an impressive 40% compound annual growth rate over the next five years. This positions TSM as the undisputed backbone of AI-driven technological advancements. To capitalize on the AI-driven growing demand for advanced chips, Taiwan Semiconductor is investing heavily in expanding production capabilities. The company is set to invest between $38 billion and $42 billion in capital expenditures in 2025, far outpacing its $29.8 billion investment in 2024. The bulk of this spending, around 70%, is focused on advanced manufacturing processes, ensuring TSM stays ahead of other chip manufacturing rivals. TSMC's Resilient Financial Performance Taiwan Semiconductor's latest earnings report highlights just how dominant the company remains. In the second quarter of 2025, TSM's revenues surged 44% year over year to $30.07 billion, while EPS jumped 61% to $2.47. This growth was powered by the booming demand for its advanced 3nm and 5nm nodes, which now account for 58% of total wafer sales. Gross margins improved 540 basis points to 58.6%, reflecting better cost efficiencies. Buoyed by strong demand for its 3nm and 5nm chips, Taiwan Semiconductor raised its revenue growth guidance for full-year 2025 to 30% from mid-20% projected earlier. For the third quarter, TSMC expects revenues in the range of $31.8-$33 billion, calling for a sequential increase of 6%-10%. The Zacks Consensus Estimate for third-quarter and full fiscal 2025 revenues is pegged at $32.38 billion and $118.11 billion, respectively. Favorable Valuation: A Reason to Hold TSM Stock Despite a robust rally, Taiwan Semiconductor stock still looks reasonably priced. It trades at a forward 12-month price-to-earnings (P/E) multiple of 22.27, which is lower than the sector average of 27.47. This discount adds to the appeal for long-term investors. Compared with other major semiconductor players, Taiwan Semiconductor has a higher P/E ratio than ON Semiconductor but has a lower multiple than ASML Holding and Marvell Technology. At present, ASML Holding, ON Semiconductor and Marvell Technology trade at P/E multiples of 24.33, 16.92 and 24.01, respectively. Near-Term Challenges Persist for TSMC Despite its strengths, Taiwan Semiconductor faces near-term headwinds. Higher energy prices in Taiwan, following a 25% electricity hike in 2024, pose a considerable challenge, especially as advanced nodes demand greater power. Softness in key markets like PCs and smartphones also dampens near-term prospects. These traditionally strong revenue drivers are projected to see only low single-digit growth in 2025, limiting Taiwan Semiconductor's growth despite rising AI demand. The company's global expansion strategy adds further strain. New fabs in the United States (Arizona), Japan and Germany are vital for geopolitical risk mitigation, but they come with higher costs. These facilities are expected to drag down gross margins by 2-3 percentage points annually over the next three to five years due to higher labor and energy costs, along with lower utilization rates in the early stages. Escalating geopolitical tensions, particularly U.S.-China relations, pose strategic risks. With significant revenue exposure to China, Taiwan Semiconductor is vulnerable to export restrictions, supply-chain disruptions or further regulatory pressure. These uncertainties could weigh on near-term performance. Conclusion: Hold TSM Stock for Now Taiwan Semiconductor remains a cornerstone of the semiconductor industry. Its unmatched capabilities in advanced chip manufacturing, strong exposure to AI demand and expanding capacity give it a solid long-term trajectory. However, short-term headwinds, from rising costs and global expansion pressures to geopolitical friction, call for a more cautious stance. Given its valuation and growth backdrop, holding the stock makes the most sense right now. Taiwan Semiconductor carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks' Research Chief Picks Stock Most Likely to "At Least Double" Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren't winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%. See Our Top Stock to Double (Plus 4 Runners Up) >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ASML Holding N.V. (ASML): Free Stock Analysis Report Marvell Technology, Inc. (MRVL): Free Stock Analysis Report ON Semiconductor Corporation (ON): Free Stock Analysis Report
Yahoo
6 days ago
- Business
- Yahoo
ON Semiconductor (ON) Nosedives 15% as Cautious Market Weighs on Outlook
We recently published . ON Semiconductor Corp. (NASDAQ:ON) is one of the companies that stood stronger last week. ON Semiconductor saw its share prices drop by 15.58 percent on Monday to close at $47.97 apiece as investors soured on its chief executive officer's warning of a cautious market sentiment that could dampen its profits and margins. In an investor call, ON Semiconductor Corp. (NASDAQ:ON) CEO Hassane El-Khoury said that there 'is a lot of uncertainty in the automotive market,' and that both Europe and North America are weak. 'You have the tariff, and you have just the general uncertainty of end market demand. So you see customers waiting to the last minute to place an order and an end,' he was quoted as saying. In the second quarter of the year, ON Semiconductor Corp. (NASDAQ:ON) dropped its attributable net income by 50 percent to $170.3 million from the $338.2 million registered in the same period last year. Revenues decreased by 15 percent to $1.47 billion from $1.73 billion year-on-year. For the third quarter of the year, ON Semiconductor Corp. (NASDAQ:ON) said it expects revenues to end between $1.47 billion and $1.56 billion. While we acknowledge the potential of ON as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the .
Yahoo
7 days ago
- Business
- Yahoo
S&P 500 Gains and Losses Today: Retail Sector Stocks Rise Amid Rate Cut Hopes
Key Takeaways The S&P 500 jumped 1.5% on Monday, Aug. 4, 2025, snapping a four-day losing streak as stocks bounced back from the previous session's sell-off. Growing expectations that the Fed will move to lower interest rates, which would lower the cost of borrowing for consumers, helped underpin gains for various retail stocks. IDEXX Laboratories beat quarterly estimates and raised its full-year forecasts, and shares of the animal healthcare company skyrocketed to lead S&P 500 gainers. Shares of ON Semiconductor tumbled after the chipmaker discussed cautious spending by its customers and uncertainty in the automotive U.S. equities indexes pushed higher at the top of the new trading week, bouncing back from declines posted ahead of the weekend. Although weaker-than-expected jobs data released on Friday raised concerns about the resilience of the economy, the slowdown in hiring and uptick in unemployment could add to the case for upcoming interest-rate cuts by the Federal Reserve. The S&P 500 gained 1.5% on Monday, ending a streak of four consecutive negative trading sessions. The Dow also clawed back from Friday's sell-off, adding 1.3%, while the Nasdaq climbed around 2%. Shares of animal health company IDEXX Laboratories (IDXX) secured the top performance in the S&P 500 on Monday with a surge of more than 27%. The provider of diagnostics tools and other equipment for veterinary laboratories topped sales and profit estimates for the second quarter and lifted its full-year forecasts, citing strong demand for a recently launched product that analyzes samples from animals' ears. William Blair analysts said IDEXX could also benefit from an aging pet population driven by accelerated pet adoptions during the pandemic. Growing expectations that the Fed will move to lower interest rates, which would lower the cost of borrowing for consumers, helped underpin gains for various retail stocks. Shares of kitchenware and home furnishings specialist Williams-Sonoma (WSM) jumped 6.9%. Shares of Tapestry (TPR), the fashion holding company behind the Kate Spade and Coach brands, advanced 5.3%. PG&E (PCG) shares gained 6.5%, recovering from losses posted late last week after the California-based power utility reported a year-over-year revenue decline for the second quarter, falling short of expectations. However, CEO Patricia Poppe said the energy provider could be in a position to reduce customer bills within the next couple of years as it executes its growth plans. PG&E also said it does not intend to issue additional equity to fund its spending plans, regardless of the outcome on potential state legislation on wildfire prevention and customer billing that could affect utilities in the Golden State. Shares of analog and power management chipmaker ON Semiconductor (ON) fell the furthest of any S&P 500 stock on Monday, plummeting nearly 16%. Although Onsemi matched adjusted profit estimates and edged ahead of quarterly sales expectations, revenue was down from a year ago. The company pointed to cautious behavior by its customers, high levels of uncertainty in its key automotive market, and softness in Europe and North America. Paramount Global (PARA) announced that David Ellison will take the reins of the combined company following the completion of the merger later this week between Paramount and Ellison's Skydance Media. Meanwhile, Tom Ryan is set to step down from his role as president and CEO of Paramount Streaming. Paramount Global shares tumbled 5.4% on Monday. LyondellBasell Industries (LYB) shares dropped 4.7%, extending losses posted Friday after the producer of plastics, chemicals, and fuels reported lower-than-expected profits for the second quarter. Although revenue came in ahead of expectations, LyondellBasell outlined a strategic plan including asset sales in an effort to optimize its portfolio in response to challenging market conditions. Read the original article on Investopedia Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
7 days ago
- Business
- Yahoo
ON Semiconductor Corp. (ON) Reports Q2 Earnings: What Key Metrics Have to Say
For the quarter ended June 2025, ON Semiconductor Corp. (ON) reported revenue of $1.47 billion, down 15.4% over the same period last year. EPS came in at $0.53, compared to $0.96 in the year-ago quarter. The reported revenue represents a surprise of +1.3% over the Zacks Consensus Estimate of $1.45 billion. With the consensus EPS estimate being $0.54, the EPS surprise was -1.85%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how ON Semiconductor Corp. performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Revenue- Market- Others: $329.3 million versus $310.18 million estimated by eight analysts on average. Compared to the year-ago quarter, this number represents a -8.6% change. Revenue- Market- Industrial: $406.2 million versus $420.53 million estimated by eight analysts on average. Compared to the year-ago quarter, this number represents a -13.2% change. Revenue- Market- Automotive: $733.2 million versus the eight-analyst average estimate of $718.62 million. The reported number represents a year-over-year change of -19.2%. Revenue- Product- Intelligent Sensing Group: $214.6 million versus the three-analyst average estimate of $234.83 million. The reported number represents a year-over-year change of -14.9%. Revenue- Product- Analog & Mixed-Signal Group: $555.9 million compared to the $557.94 million average estimate based on three analysts. Revenue- Product- Power Solutions Group: $698.2 million compared to the $657.88 million average estimate based on three analysts. The reported number represents a change of -16.4% year over year. View all Key Company Metrics for ON Semiconductor Corp. here>>> Shares of ON Semiconductor Corp. have returned +0.4% over the past month versus the Zacks S&P 500 composite's +0.6% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ON Semiconductor Corporation (ON) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
