What Happened?

Shares of analog chips maker onsemi (NASDAQ:ON) fell 11.3% in the afternoon session after President Trump announced "reciprocal tariffs" on all US imports, set at a minimum rate of 10%. From clothing brands and electronics makers to the e-commerce sites that move their goods, companies built on global supply chains took the biggest hit. Stocks with heavy exposure to Asia were especially hard-hit, as the new tariffs threatened the growth and profits of firms with factories in the region. Vietnam, central to many companies' production plans, faced a 46% tariff. Cambodia and Indonesia were also in the crosshairs, with tariff rates of 49% and 32%. These measures could significantly erode the competitiveness of goods produced in those regions. For example, reduced production volumes would negatively affect the sales growth of all companies benefiting from these manufacturing hubs.

The shares closed the day at $35.59, down 12.7% from previous close.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy onsemi? Access our full analysis report here, it’s free.

What The Market Is Telling Us

onsemi’s shares are very volatile and have had 25 moves greater than 5% over the last year. But moves this big are rare even for onsemi and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 8 months ago when the stock gained 13.1% on the news that 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.

onsemi is down 42.8% since the beginning of the year, and at $35.30 per share, it is trading 55.2% 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 $3,227.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.