A Sharp Pullback in Chip Stocks Meets Fresh Records in Four of Five Recent Earnings Reports

Seagate increased its quarterly dividend by approximately 3%, while all five companies provided revenue guidance for their next quarter.

Rhea-AI Summary

ON Semiconductor (ON) and four chip and storage peers fell as semiconductor stocks declined despite recently reported quarterly revenue growth. At 10:18 a.m. ET on November 5, the PHLX Semiconductor Index fell 8.05% to 9,442.47, about 35% below its highest close of the past 52 weeks but roughly 33% above its 2025 close.

ON reported third-quarter revenue of $1,722 million, up 11% year-over-year, and guided fourth-quarter revenue to $1,715 million–$1,815 million. AMD (AMD) reported third-quarter revenue of $13.4 billion, up 45%; Arm (ARM) reported fiscal second-quarter revenue of $1,443 million, up 27%. Seagate (STX) reported fiscal first-quarter revenue of $4,233 million versus $2,629 million a year earlier. Tower Semiconductor (TSEM) reported third-quarter revenue of $526 million, up 33%. All five reports preceded the session and do not address its selloff.

20 points · 0 major

PositiveiHow this balance works

How this balance works

Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

Rhea-AI Sentiment measures something else, the tone of the wording.

How the balance worksHow Sentiment works

0 major · 6 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate pointON Semiconductor third-quarter 2026 revenue rose 11% year-over-year to $1,722 million.
• Moderate pointON Semiconductor third-quarter 2026 free cash flow rose 31% year-over-year to $489 million.
• Moderate pointON Semiconductor AI data center revenue grew 39% sequentially and 175% year-over-year in the third quarter.
• Moderate point. Forward-looking: it has not happened yet and may not happen.ON Semiconductor guided fourth-quarter 2026 revenue to $1,715 million–$1,815 million.
• Minor pointAMD third-quarter 2026 revenue increased 45% year-over-year to $13.4 billion.

15 minor points

• Minor pointAMD Data Center third-quarter 2026 revenue reached a record $8.5 billion, up 97% year-over-year.
• Minor point. Forward-looking: it has not happened yet and may not happen.AMD expects fourth-quarter 2026 revenue of approximately $17 billion, plus or minus 3%.
• Minor pointArm fiscal second-quarter 2027 revenue increased 27% year-over-year to $1,443 million.
• Minor pointArm fiscal second-quarter 2027 license and other revenue grew 50% year-over-year; royalty revenue grew 8%.
• Minor pointArm data center royalties doubled year-over-year in fiscal second-quarter 2027.
• Minor point. Forward-looking: it has not happened yet and may not happen.Arm guided fiscal third-quarter 2027 revenue to $1.54 billion, plus or minus $50 million.
• Minor pointSeagate fiscal first-quarter 2027 revenue reached $4,233 million, versus $2,629 million a year earlier.
• Minor pointSeagate fiscal first-quarter 2027 GAAP gross margin was 57.3%.
• Minor pointSeagate generated $1.5 billion free cash flow in fiscal first-quarter 2027.
• Minor pointSeagate increased its quarterly cash dividend approximately 3% to $0.76 per share.
• Minor point. Forward-looking: it has not happened yet and may not happen.Seagate guided fiscal second-quarter 2027 revenue to $4.8 billion, plus or minus $100 million.
• Minor pointTower Semiconductor third-quarter 2026 revenue reached a record $526 million, up 33% year-over-year.
• Minor pointTower Semiconductor third-quarter 2026 gross profit reached a record $179 million.
• Minor point. Forward-looking: it has not happened yet and may not happen.Tower guided fourth-quarter revenue to $600 million, plus or minus 5%; the midpoint represents 36% year-over-year growth.
• Minor point. Forward-looking: it has not happened yet and may not happen.Tower CEO projected $2 billion annual revenue and a $2.4 billion annualized revenue run rate at year-end.

Negative

• Minor pointPHLX Semiconductor Index fell 8.05% at 10:18 a.m. ET November 5, about 35% below its 52-week highest close.
• Minor pointAMD shares fell 13.44% versus the prior close at 10:18 a.m. ET November 5.
• Minor pointSeagate shares fell 13.22% versus the prior close at 10:18 a.m. ET November 5.
• Minor pointArm shares fell 12.14% versus the prior close at 10:18 a.m. ET November 5.
• Minor pointTower Semiconductor shares fell 8.57% versus the prior close at 10:18 a.m. ET November 5.
• Minor pointON Semiconductor shares fell 6.27% versus the prior close at 10:18 a.m. ET November 5.

Key Figures

SOX change: -8.05% ON share change: -6.27% Q3 revenue: $1,722 million; up 11% year over year +3 more

SOX change

-8.05%

At 10:18 a.m. ET on November 5, 2026

ON share change

-6.27%

At 10:18 a.m. ET on November 5, 2026

Q3 revenue

$1,722 million; up 11% year over year

ON, third quarter 2026

Free cash flow

$489 million; up 31% year over year

ON, third quarter 2026

AI data center revenue growth

Up 39% sequentially and 175% year over year

ON

Revenue guidance

$1,715 million to $1,815 million

ON, fourth quarter 2026

Historical Context

1 past event · Latest: Nov 02

1 event

1. Nov 02

   earnings report

   24h Move

   +3.5%

   Q3 revenue rose 11% year over year and fourth-quarter revenue outlook was $1,715–$1,815 million.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

free cash flow, gaap gross margin

2 terms

free cash flow financial

"free cash flow of $489 million, up 31% year-over-year"

Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.

View in glossary

gaap gross margin financial

"with a GAAP gross margin of 57.3%"

GAAP gross margin is a financial measure that shows the percentage of revenue remaining after subtracting the costs directly associated with producing goods or services, calculated according to standard accounting rules. It indicates how efficiently a company is turning sales into profit before accounting for other expenses, and higher gross margins generally suggest better profitability potential. This metric helps investors assess a company's pricing power and cost management.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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NEW YORK, Nov. 5, 2026 /PRNewswire/ -- Market Updates News Commentary - Semiconductor stocks are taking the brunt of a lower market this morning. As of 10:18 a.m. ET, the PHLX Semiconductor Index (SOX) was down 826.18 points, or 8.05%, at 9,442.47, a steeper decline than the Nasdaq Composite (down 3.74%) or the S&P 500 (down 2.21%). Even after today's move, the index stood about 33% above where it finished 2025, based on daily closing prices, and the quarterly reports published over the past two weeks by the five chip and data storage companies below all show revenue higher than a year earlier. Active Companies from around the markets with current developments this week include: Advanced Micro Devices, Inc. (NASDAQ: AMD), Arm Holdings plc (NASDAQ: ARM), ON Semiconductor Corporation (Nasdaq: ON), Seagate Technology Holdings plc (NASDAQ: STX), Tower Semiconductor Ltd. (NASDAQ/TASE: TSEM).

The selling reached well beyond chips. As of 10:18 a.m. ET, the S&P 500 was at 7,518.71, down 169.91 points, and the Nasdaq Composite was at 24,774.61, down 961.90 points. The Dow Jones Industrial Average was down 658.12 points, or 1.23%, at 52,698.00, and the small cap Russell 2000 was down 1.74% at 2,807.10. In the bond market, the yield on the 10-year Treasury note was 4.868%, compared with 4.894% at the prior close.

A single session is one data point, and the longer record gives it some scale. Based on daily closing prices, the SOX finished 2025 at 7,083.13 and closed at 7,190.27 one year ago today, which leaves this morning's level roughly 33% above the year-end mark and about 31% above where it stood a year ago. The index was already working through a pullback before today: its highest close of the past 52 weeks was 14,634.72 on June 22, 2026, and this morning's level sits about 35% below that peak. The broader market has held up better on a year-to-date basis, with the S&P 500 about 10% above its 2025 closing level and the Nasdaq Composite about 7% above its own.

Share prices can reprice a company in minutes. Quarterly results move more slowly, and this earnings season has given investors a detailed, company-by-company read on what is happening underneath the ticker symbols, from data center processors and chip designs to power semiconductors, mass storage and specialty foundry services.

Days like this one are a good reminder that the story and the chart are two different things, and it helps to know how to read both. Our sister site, Stock Preachers, offers a free 27-page guide, Knowledge is Power, that teaches those two skills in plain English across 10 chapters, from support, resistance and trendlines to the indicators that matter, chart patterns, reading the news, and risk and a trading plan.

Data center demand runs through the latest numbers

Advanced Micro Devices, Inc. (NASDAQ: AMD) reported its third quarter 2026 results on November 3, with revenue of $13.4 billion, up 45% year-over-year. Data Center segment revenue was a record $8.5 billion, up 97% year-over-year, which the company said was driven by strong demand for AMD EPYC processors and the launch of AMD Instinct MI450 Series GPUs. For the fourth quarter of 2026, AMD said it expects revenue of approximately $17 billion, plus or minus 3%. AMD shares were down 13.44% as of 10:18 a.m. ET.

"We delivered a record quarter with revenue exceeding the high end of our guidance as Data Center segment sales nearly doubled year-over-year," said Dr. Lisa Su, AMD chair and CEO.

Arm Holdings plc (NASDAQ: ARM) published its second quarter fiscal year 2027 shareholder letter on November 4. Total revenue increased 27% year-over-year to $1,443 million, which Arm described as its best ever second-quarter revenue. License and other revenue grew 50% to $773 million and royalty revenue grew 8% to $670 million, with data center royalties doubling year over year. Arm also said its partners reported more than 10 billion Arm-based chips shipped during the quarter for the first time, and gave third quarter fiscal year 2027 revenue guidance of $1.54 billion, plus or minus $50 million. Arm shares were down 12.14% as of 10:18 a.m. ET.

"Arm delivered its fifth consecutive quarter of revenue growth above 20%, reflecting the strength of our business as AI drives increasing demand for compute," said Rene Haas, CEO of Arm, in the letter.

Power, storage and specialty foundry tell a similar story

ON Semiconductor Corporation (Nasdaq: ON), known as onsemi, reported third quarter 2026 revenue of $1,722 million on November 2, an increase of 11% year-over-year, along with free cash flow of $489 million, up 31% year-over-year. The company said AI data center revenue grew 39% sequentially and 175% year-over-year, and it guided fourth quarter revenue to a range of $1,715 million to $1,815 million. onsemi shares were down 6.27% as of 10:18 a.m. ET.

"Increasing power requirements are driving accelerated demand in our AI data center and industrial end markets, as customers adopt and ramp our differentiated products," said Hassane El-Khoury, President and CEO of onsemi.

Seagate Technology Holdings plc (NASDAQ: STX), which describes itself as a leading innovator of mass-capacity data storage, reported fiscal first quarter 2027 results on October 28. Revenue was $4,233 million, compared with $2,629 million in the same quarter a year earlier, with a GAAP gross margin of 57.3% and free cash flow of $1.5 billion. Seagate also increased its quarterly cash dividend by approximately 3% to $0.76 per share and guided fiscal second quarter revenue to $4.8 billion, plus or minus $100 million. Seagate shares were down 13.22% as of 10:18 a.m. ET.

"Seagate delivered another quarter of record profitability and our highest ever free cash flow in the September quarter, demonstrating the earnings power of our business amid a strengthening demand environment," said Dave Mosley, Seagate's chair and chief executive officer.

Tower Semiconductor Ltd. (NASDAQ/TASE: TSEM), a foundry of high-value analog semiconductor solutions, reported record third quarter revenue of $526 million on November 2, representing growth of 33% year over year, along with record gross profit of $179 million. Tower guided fourth quarter revenue to $600 million, with an upward or downward range of 5%, and said the midpoint represents an increase of 36% year-over-year. Tower shares were down 8.57% as of 10:18 a.m. ET.

"We are entering the strongest growth phase in our history, according to fourth quarter guidance, closing the year at $2 billion annual revenue and a $2.4 billion annualized revenue run rate," said Russell Ellwanger, Chief Executive Officer of Tower Semiconductor.

Keeping one session in context

All five of these reports were published before today's session, so none of them addresses this morning's move. What they do provide is a record, in each company's own numbers, of its latest quarter's revenue and margins and its outlook for the quarter ahead, which readers can set alongside the daily moves in the index.

For readers who want a framework for both sides of that picture, the free Knowledge is Power guide from Stock Preachers is available to Market Updates readers, along with The Roadmap every Monday, Wednesday and Friday, at market-updates.com/

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This article is independent news commentary. Market Updates is wholly owned and operated by Market Equities Limited ("MEL"), a company incorporated under the laws of Ireland. MEL has not been paid by any company mentioned in this article. MEL and/or its owners, operators, directors, and affiliates own shares of Advanced Micro Devices, Inc. and do not intend to sell any of those shares within 30 days of the date of this article. They reserve the right to, and will, buy shares of those companies at any time without further notice, and after that 30-day period reserve the right to, and will, sell shares of those companies at any time without further notice. This ownership constitutes a conflict of interest as to our ability to remain objective in our communication regarding those companies, and individuals are strongly encouraged to not use this publication as the basis for any investment decision. MEL and its owners, operators, directors, and affiliates do not currently own any shares of the other companies mentioned in this article, but reserve the right to, and will, buy and sell shares of those companies at any time without further notice. Index levels, yields and share price changes are as of 10:18 a.m. ET on November 5, 2026, from third-party market data, with changes measured against the prior session close; year-to-date, one-year and 52-week comparisons are based on daily closing prices. Company figures and quotes are taken from each company's news release, shareholder letter or SEC filing. Information is drawn from company news releases and filings, government and industry data, published reporting and third-party data believed to be reliable, but its accuracy is not guaranteed. Investing in securities carries risk, including the loss of some or all of your investment. This document is governed by the laws of Ireland.

 

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FAQ

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How did ON Semiconductor perform in the third quarter of 2026?

ON Semiconductor reported revenue of $1,722 million, up 11% year-over-year, and free cash flow of $489 million, up 31%. AI data center revenue increased 39% sequentially and 175% year-over-year.

How much did semiconductor stocks fall on November 5, 2026?

The PHLX Semiconductor Index fell 8.05% to 9,442.47 at 10:18 a.m. ET. The decline exceeded the Nasdaq Composite's 3.74% drop and the S&P 500's 2.21% decline at the same time.