What Happened?
A number of stocks fell in the afternoon session after a broad selloff swept through the semiconductor industry, sparked by concerns over the future of artificial intelligence spending and rising geopolitical risks.
The negative sentiment followed a report from The Wall Street Journal which revealed that the AI firm OpenAI had missed internal targets for both new users and revenue. This news raised investor fears that a key player in the AI space might pull back on its heavy spending on data center infrastructure, potentially reducing demand for chips.
Compounding these worries were escalating tensions between the U.S. and China over AI technology and broader concerns about global supply chain disruptions. The selloff was not isolated, affecting numerous semiconductor and AI-related stocks as investors reacted to the sector-wide headwinds.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Analog Semiconductors company onsemi (NASDAQ: ON) fell 4.8%. Is now the time to buy onsemi? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company Kulicke and Soffa (NASDAQ: KLIC) fell 4.3%. Is now the time to buy Kulicke and Soffa? Access our full analysis report here, it’s free.
Zooming In On onsemi (ON)
onsemi’s shares are very volatile and have had 27 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 11 days ago when the stock gained 3% on the news that the US-Iran ceasefire eased fears of a major disruption to global tech supply chains.
Semiconductors are the backbone of the modern economy, and any threat to global shipping lanes like the Strait of Hormuz creates immediate "scarcity premiums." With the strait reopened, the logistical path for raw materials and finished chips becomes far more predictable and cost-effective. The rally was also fueled by the continued "AI revolution," which remains a primary growth driver regardless of oil price swings. However, the cooling of energy-driven inflation provides a more favorable backdrop for the massive capital expenditures required to build new fabrication plants. As the "geopolitical discount" evaporates, chipmakers are seeing strong buy-side interest across both the logic and memory markets.
onsemi is up 65.7% since the beginning of the year, and at $93.96 per share, it is trading close to its 52-week high of $98.40 from April 2026. Investors who bought $1,000 worth of onsemi’s shares 5 years ago would now be looking at an investment worth $2,267.
ONE MORE THING: 3 Hidden Platforms Growing 3X Faster than Amazon, Google, and PayPal. Amazon, Google, and Meta all followed the same playbook: Dominate an ignored market. Build an unbeatable moat. Scale until you’re unstoppable.
These three platforms are running that exact playbook right now. The early investors in Amazon made fortunes. The early investors in these could do the same. Get All 3 Stocks Here for FREE.
