What happened
Shares of Nvidia (NVDA -2.92%) were rising today on no company-specific news. Instead, investors appear to be reacting to better-than-expected quarterly results by one of Nvidia's competitors -- which indicates strength in the broader semiconductor market.
The tech stock was up by 1.6% as of 11:51 a.m. ET.
So what
ON Semiconductor, a chip company focusing on the automotive and industrial markets, reported its first-quarter results today, with non-GAAP earnings per share of $1.22, up from just $0.35 in the year-ago quarter, and above Wall Street's consensus estimate of $1.05 per share.
Image source: Getty Images.
ON Semiconductor's first-quarter sales of $1.95 billion also outpaced analysts' consensus estimate of $1.9 billion.
Strong financial results from one company can help lift the share prices of others in the same sector if investors believe that the results indicate that their shared market is doing well.
That appears to be what's happening today with Nvidia's stock. Investors see strong results from ON Semiconductor and are optimistic that the chip market is healthy.
This is the second time in less than a week that a semiconductor company beat Wall Street's average estimates. Qualcomm reported second-quarter financial results last week, with sales and earnings that were better than expected.
Now what
Nvidia's share price is down 26% over the past six months, so it's not all that surprising that investors are looking for any positive news in the semiconductor market.
Nvidia will report its first-quarter results on May 25, so investors will have to wait until then before they see whether or not the company is benefiting from the chip market in the same ways that ON Semiconductor and Qualcomm are right now.
It's worth mentioning, though, that with the stock market experiencing significant price swings lately, there could still be more volatility ahead for Nvidia's shares as well.
