On Semiconductor Corp. (ON) reported first-quarter results after Monday's closing bell, beating estimates across the board. But the stock is sliding anyway — a classic case of "good news, bad reaction."

The chipmaker posted adjusted earnings of 64 cents per share, topping the analyst estimate of 60 cents by nearly 7%. Revenue hit $1.51 billion, also above the $1.49 billion consensus, according to market data.

AI data center revenue was the star of the show, more than doubling year-over-year. "AI data center revenue more than doubled year-over-year due to broader adoption across the power tree with multiple chip vendors and leading hyperscalers," the company said in its earnings release.

CEO Hassane El‑Khoury added: "We exceeded expectations as demand strengthened through the quarter and we have moved beyond the cyclical trough on a path to recovery. Our AI data center business accelerated, growing more than 30% sequentially."

Looking ahead, On Semi expects second-quarter adjusted EPS of 65 to 77 cents, versus the 65-cent analyst estimate, and sales of $1.535 billion to $1.635 billion, above the $1.526 billion consensus. The guidance suggests the recovery is real, but the market may have wanted more.

As of Monday's extended trading, ON stock was down 4.41% to $97.54.