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Recent commentary on ON Semiconductor (ON) has spotlighted weak end-market demand, flat near term sales expectations, and relatively low gross margins, while fresh analyst rating changes point to a mixed, uncertain outlook.
See our latest analysis for ON Semiconductor.
ON Semiconductor’s recent 1-day share price return of 3.33% and 90-day return of 34.32%, with the stock now at $65.20, contrast with a weaker 3-year total shareholder return showing a 22.20% decline. This suggests that shorter term momentum has picked up while longer term holders have experienced a tougher period.
If this mixed performance has you thinking about where else growth in chips and AI hardware might show up, it could be worth scanning our list of 33 AI infrastructure stocks as a starting point for other opportunities tied to similar themes.
With ON trading around $65.20, carrying an intrinsic value estimate that is higher and sitting slightly above the average analyst target, the real question is whether recent weakness and AI enthusiasm leave a genuine entry point or if markets are already pricing in future growth.
ON Semiconductor’s most followed narrative pegs fair value at $63.00, slightly below the recent $65.20 share price. This frames a modest premium that hinges on specific growth and margin assumptions.
Ongoing portfolio rationalization phasing out legacy and non-core products, and reallocating resources towards higher-margin, differentiated offerings (such as ADAS image sensing and machine vision) should improve product mix and boost average margins, positively impacting net profitability and earnings leverage.
Read the complete narrative. Read the complete narrative.
Curious what earnings power would need to look like to justify that price, and how much of it rests on richer margins over time and a higher future P/E multiple? The full narrative lays out a detailed path for revenue, profitability and valuation that goes well beyond the recent share price bounce.
Result: Fair Value of $63.00 (OVERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, the story can shift quickly if automotive demand weakens further or manufacturing remains underutilized, which would keep pressure on margins and delay any expected earnings lift.
Find out about the key risks to this ON Semiconductor narrative.
If you see the data differently or prefer to test your own assumptions, you can quickly build a custom ON view and Do it your way in under three minutes.
A great starting point for your ON Semiconductor research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.
If ON does not quite fit what you have in mind, do not stop here. Your next strong idea could be a single screener result away.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include ON.
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