What Happened?
A number of stocks fell in the afternoon session after the U.S.-China summit concluded without any significant breakthroughs on semiconductor sales to the country.
Expectations had been building for a potential deal, particularly regarding Washington's authorization for Nvidia to export its H200 chips to China. However, the summit ended without a formal approval for the shipments from Beijing. This lack of progress disappointed investors who had hoped for a resolution.
Adding to the negative sentiment, U.S. Trade Representative Jamieson Greer stated in an interview that semiconductors were not a primary focus during the talks between President Trump and Chinese leader Xi Jinping, dashing hopes for a near-term catalyst for the sector.
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:
- Semiconductor Manufacturing company KLA Corporation (NASDAQ: KLAC) fell 3.2%. Is now the time to buy KLA Corporation? Access our full analysis report here, it’s free.
- Analog Semiconductors company Monolithic Power Systems (NASDAQ: MPWR) fell 3.1%. Is now the time to buy Monolithic Power Systems? Access our full analysis report here, it’s free.
- Analog Semiconductors company onsemi (NASDAQ: ON) fell 4.1%. Is now the time to buy onsemi? Access our full analysis report here, it’s free.
- Semiconductor Manufacturing company Semtech (NASDAQ: SMTC) fell 2.7%. Is now the time to buy Semtech? Access our full analysis report here, it’s free.
- Processors and Graphics Chips company Lattice Semiconductor (NASDAQ: LSCC) fell 3.1%. Is now the time to buy Lattice Semiconductor? Access our full analysis report here, it’s free.
Zooming In On onsemi (ON)
onsemi’s shares are very volatile and have had 26 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 17 days ago when the stock dropped 4.8% on the news that 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.
onsemi is up 101% since the beginning of the year, and at $114.18 per share, it is trading close to its 52-week high of $118.37 from May 2026. Investors who bought $1,000 worth of onsemi’s shares 5 years ago would now be looking at an investment worth $3,108.
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