๐ฆ onsemi: The Rebound is ON for This Chip Stock
onsemi’s (NASDAQ: ON) stock price corrected significantly over the last year, setting up today's opportunity. Today's opportunity is a rebound in an oversold name with a solid outlook for long-term growth. The chart action confirms support; the analysts are leading the market, and the Q1 results are better than expected, so this rebound could have legs. The company faces headwinds in 2024, but Q1 results indicate that conditions are better than feared, and a pivot back to growth is expected at the end of the year. onsemi’s end-markets are normalizing, and AI is driving the long-term outlook: onsemi isn’t an AI juggernaut but well-positioned to benefit from the demands higher-computing power will put on the entire tech ecosystem. .
Equity markets began the week on uncertain footing, wobbling at the previous week's close and advancing a slim 0.3% on Monday. The move reveals a hopeful market focused on earnings yet harboring doubt about the FOMC and inflation. The FOMC is meeting this week and is expected to unveil its next policy statement on Wednesday. The fear is that the next move in interest may not come until later in the year. Last week's PCE price index did not give any reason to cut rates, leaving the door open for inflation to accelerate.
The S&P 500 is poised to move higher and may advance regardless of changes in the FOMC outlook. Earnings are still solid and may return the market to retest all-time highs. The risk is that all-time highs may provide an attractive exit for investors fearful of what the 2nd half will bring. The S&P 500 will be capped at all-time highs with the risk of another, larger price correction in this scenario.
onsemi’s (NASDAQ: ON) stock price corrected significantly over the last year, setting up today's opportunity. Today's opportunity is a rebound in an oversold name with a solid outlook for long-term growth. The chart action confirms support; the analysts are leading the market, and the Q1 results are better than expected, so this rebound could have legs. The company faces headwinds in 2024, but Q1 results indicate that conditions are better than feared, and a pivot back to growth is expected at the end of the year. onsemi’s end-markets are normalizing, and AI is driving the long-term outlook: onsemi isn’t an AI juggernaut but well-positioned to benefit from the demands higher-computing power will put on the entire tech ecosystem.
It's an under-the-radar stock reshaping a projected $109 billion industry - And, I believe, has far more potential than the AI stocks most investors are focused on in the days ahead.
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