The market warmed to ON Semiconductor's (NASDAQ: ON) second-quarter earnings report, and the stock has now significantly outperformed Nvidia over the last month, with a 14.2% increase compared to a 5.4% decline for the stock market darling (as of this writing). The question is why and whether it can continue.

ON Semiconductor services two highly cyclical end markets, namely automotive (electric vehicles, power management, advanced driver assistance systems, etc.) and industrial (automation, EV infrastructure, machine vision, etc.), which are declining this year for various reasons.

The chart below shows the sequential revenue decline trend established since the third quarter of 2023. Moreover, management expects the year-over-year declines to continue in the third quarter, with guidance for revenue of $1.7 billion to $1.8 billion, compared unfavorably with the $2.18 billion reported in the third quarter of 2023.

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Source Fool.com