ON Semi jumps after results while Nvidia hits 13 month high

ON Semiconductor's shares jumped 7 per cent on Monday after the chipmaker's quarterly guidance beat Wall Street's expectations, spurring other chip stocks with heavyweight Nvidia hitting its highest level in over a year.

With investors looking for signs of when a downturn in global chip revenue may bottom out, ON Semiconductor's quarterly results and guidance beat analysts' expectations even as the supplier of chips for automobiles and industry said it was taking a "cautious stance" to its outlook because of macroeconomic uncertainty.

Graphic: Chip stocks outperform on Wall Street - https://fingfx.thomsonreuters.com/gfx/mkt/klvygjgxzvg/Pasted%20image%201682959398308.png

While the mid-point of ON Semiconductor's guidance for quarterly revenue between $1.975 billion and $2.075 billion implies a 3 per cent dip from the year-ago quarter, it exceeded analyst expectations for a 7 per cent drop, and it helped lift shares of other chipmakers.

The Philadelphia Semiconductor index climbed 0.7 per cent, outperforming the Nasdaq's 0.1 per cent rise. Nvidia, the world's most valuable chipmaker, climbed 3.5 per cent to its highest since March 2022.

Lattice Semiconductor rose 1.8 per cent ahead of its quarterly report expected after the bell.

Investors will look for additional readings on the health of the chip industry with more players set to report this week, including Advanced Micro Devices on Tuesday, Qorvo and Qualcomm on Wednesday and Cirrus Logic on Thursday.

The Philadelphia chip index has rebounded nearly 40 per cent from its closing low in October 2022, but is down 25 per cent from its high in 2021.