ON Semiconductor: AI Power, Auto Recovery, And The Problem Of Price
ON Semiconductor has shifted its focus from a cyclical Auto/Industrial narrative to one centered on AI power infrastructure. Despite reporting a revenue increase in Q1 2026, the company's valuation appears to fully account for anticipated margin recovery and AI growth. Analysts suggest a sell/reduce rating due to ongoing challenges with cash conversion and high inventory levels.
- ▪ON Semiconductor's Q1 2026 revenue was $1.51 billion, reflecting a 5% year-over-year increase.
- ▪The company's gross margin stood at 38.5%, with AI data center revenue growing by 30%.
- ▪Analysts have set a target price of $85–90 for ON stock, indicating a potential 29% downside.
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