Why Are Semiconductor Stocks WOLF, ON Up Today?

  • U.S. Chipmakers Wolfspeed (WOLF) and ON (ON) are up 30% and 9%, respectively, today following WOLF’s strong earnings call.
  • Wolfspeed managed to dazzle investors with its narrower-than-expected loss and strong revenue figures.
  • The company also substantially raised its long-term forecast based on improving semiconductor market conditions.
semiconductor stocks - Why Are Semiconductor Stocks WOLF, ON Up Today?

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A number of semiconductor stocks are soaring today after U.S.-based chipmaker Wolfspeed (NYSE:WOLF) managed to smash earnings expectations. Wolfspeed and On Semiconductor (NASDAQ:ON) are both well in the green on an otherwise lukewarm day for the markets.

This morning, Wolfspeed announced its financial results for its fiscal fourth quarter and full-year 2022. The company beat both revenue and earnings per share estimates and set the stage for strong growth heading into its fiscal 2023. Indeed, the semiconductor company posted a loss per share of 2 cents, compared to Wall Street consensus estimates for a 10-cent loss. Wolfspeed also reported Q4 revenue of $228.5 million, beating expectations by $20.9 million.

CEO Gregg Lowe had some promising words for the future:

We delivered an extremely strong quarter to close out the fiscal year and I am very proud of the progress the Wolfspeed team has made in delivering on our goals. We announced a number of exciting customer wins, opened the world’s first fully automated 200mm Silicon Carbide fab at Mohawk Valley, and made significant strides in growing our top-line, while also improving profitability. … This achievement, coupled with the previous two quarters of $1.6 billion each, provides further evidence of the upward pressure we are seeing on our 2026 revenue outlook, which we now believe is between 30 to 40 percent higher than the $2.1 billion we forecasted at the end of last year.

Fortunately for fans of WOLF stock, investors were clearly listening closely to the earnings call.

Semiconductor Stocks Climb on WOLF Earnings, New ON Price Target

WOLF stock is up a staggering 30% today following the company’s triumphant report. Not alone, however, fellow U.S. chipmaker ON is also enjoying a pleasant 9% boost today. It seems optimism surrounding the growing adoption of electric vehicles has eased bearish sentiment.

What is going on? The ongoing semiconductor shortage has resulted in widespread production bottlenecks and sky-high prices for everything from cars to video game consoles. With the future looking increasingly green, given the recent signing of the Inflation Reduction Act, the need for microchips appears to only be growing. This comes as a relief for many investors, who were likely spooked by a slowdown in tech sales.

Companies like Wolfspeed and ON offer investors exposure to a high-growth industry that appears to only be increasing in relevancy. In fact, a number of analysts recently raised their price targets on ON following the company’s expansion event in New Hampshire. Citing its rapid expansion timeline and strong positioning in the auto space, Mizuho analyst Vijay Rakesh raised his price target from $72 to $79 per share. This comes after the analyst raised his price target on the company from $68 to $72 just earlier this month.

Wolfspeed and ON are showing investors just how ripe for expansion the semiconductor field is.

On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

With degrees in economics and journalism, Shrey Dua leverages his ample experience in media and reporting to contribute well-informed articles covering everything from financial regulation and the electric vehicle industry to the housing market and monetary policy. Shrey’s articles have featured in the likes of Morning Brew, Real Clear Markets, the Downline Podcast, and more.


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