The American semiconductor race is officially on, with President Joe Biden expected to sign the CHIPS Act into law any day now. As this legislation becomes reality, investors are taking stock of the chip-manufacturing field. Earnings season is giving these investors a great opportunity to see which companies are financially healthier than others. ON Semiconductor (NASDAQ:ON) is one such company, posting solid earnings. But, ON stock seems to be taking blows nonetheless.

Most stock talk in recent weeks has centered around the lagging chip business. Indeed, with so many consumer products using chip technology, supply constraints hampering semiconductor manufacturing have led directly to inflation across a whole host of electronics industries.

American lawmakers are trying to remedy the situation by spurring a chip renaissance within the U.S. The CHIPS Act is trying accomplish this through its nearly $53 billion in corporate subsidies. To compete with companies in Taiwan and South Korea — the two dominating forces within the semiconductor space — the U.S. will help fund the production of new manufacturing facilities on its soil.

Of course, the bill mostly lifts companies that are actively expanding their manufacturing footprints. Companies like ON Semiconductor won’t be receiving these subsidies with no plans for expansion. Other companies within the space like Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) also aren’t likely to benefit, as they outsource chip fabrication. However, the industry at large supports the act for stoking competition and alleviating the effects of future chip shortages.

As a result of this broad interest in the legislation, investors are seeing all sorts of price movement in the chip market. Buyers are trying to parse out the best investments in the space while interest is white-hot. Their eyes are falling on companies like ON.

ON Stock Stagnates, Despite Solid Earnings

With the CHIPS Act’s passage coinciding with earnings season, investors are getting a good peak into which companies are in the best shape. With ON Semiconductor showing an impressive Q2 for earnings, though, ON stock is stagnating.

The company reported its earnings today and it didn’t disappoint. With a Q2 revenue of over $2 billion, the company is shattering its previous quarterly revenue record. This figure makes for a 25% year-over-year increase for the company. The company’s gross margin also broke records at 49.7%. This figure is undoubtedly benefitting from the still-very-present supply chain shortages.

This is a cause for celebration among ON stock bulls. Blue-chip semiconductor companies like Intel (NASDAQ:INTC) failed to satisfy their own customers in Q2 with revenue hits. But while holders might be impressed by ON’s earnings, ON stock is actually moving down today. The stock is suffering a nearly 5% loss, causing some head scratching. Fear not — it simply seems that holders are taking profits on the good news. The stock is still up nearly 37% on the month of July alone.