ON Semiconductor (ON)
NASDAQInformation TechnologySemiconductorsSnapshot 2026-07-07
$91.10-3.79%
Close 2026-07-07 · 1-day change
Reading ON? This analysis is rebuilt every market day. Get it tracked free. No credit card.
Track ON free→NASDAQInformation TechnologySemiconductorsSnapshot 2026-07-07
Reading ON? This analysis is rebuilt every market day. Get it tracked free. No credit card.
Track ON free→A long-form read on the 1–3 year hold thesis. Slower and deeper than the daily snapshot — it refreshes only when the evidence moves.
This investment represents a turnaround story with a focus on growth in automotive, industrial, and AI data center markets. The current thesis state is cautious, as recent financial performance has been neutral, and management execution has been volatile.
The market seems to have priced in a low expectations gap, indicating that investors are not overly optimistic about significant improvements in performance. Valuation is considered cheap compared to peers, but there is a divergence in expectations, suggesting that the market is justified in its cautious stance.
Fundamentals are likely to remain under pressure in the near term, as management has struggled to deliver on key priorities like margin enhancement and market expansion. Despite a low probability of missing earnings expectations, the company has a history of disappointing results, which could weigh on sentiment.
The future performance of ON hinges on several factors, including management's ability to execute on growth priorities and the broader tech sector's momentum. Additionally, any changes in Federal Reserve interest rate policy could significantly impact the company's performance.
In the next 1 to 3 years, ON's success will depend on its ability to stabilize operations and capitalize on sector trends. Not investment advice.
The most important moves since the prior daily snapshot.
Yes, our read has weakened. This is driven by a sharp drop in the stock price, which suggests the market may be repricing the reasons to own it. Additionally, there are concerns about pricing affecting ON's ability to expand in the automotive and industrial markets. While the latest earnings beat supports revenue growth, the overall outlook has become less favorable.
as of 2026-07-07
Specific, dated things to watch for, each with what would confirm it and what would prove it wrong.
Why it matters: A drop in gross margin may mean higher costs. This could hurt profits.
Confirms:Gross margin falls below 37.9%.
Disproves:Gross margin remains above 39.9%.
Why it matters: A big drop in revenue would show market problems and slow growth efforts.
Confirms:Q1 2026 revenue was below $1.5 billion, down more than 12% from last year.
Disproves:Q1 2026 revenue stabilizes or grows year over year.
Why it matters: Maintaining revenue growth is a top priority. A drop below 5% signals trouble.
Confirms:Q2 revenue growth reported below 5% year over year.
Disproves:Q2 revenue growth reported at 5% or higher year over year.
Why it matters: Guidance below this level shows ongoing revenue problems. It may also show wider market issues.
Confirms:Q1 2025 revenue guidance is set below $1,350 million.
Disproves:Q1 2025 revenue guidance meets or exceeds $1,350 million.
Why it matters: Ongoing share buybacks show good use of funds and a promise to give value to shareholders.
Confirms:New share buyback plans announced or current buybacks completed.
Disproves:No news on share buybacks in the next quarter.
Why it matters: Slower growth in this segment could indicate a loss of momentum in a key area.
Confirms:AI data center revenue growth falls below 30% sequentially.
Disproves:AI data center revenue growth is over 30% from last quarter.
Why it matters: Improving gross margin is crucial for profitability. A rise above 10% would be positive.
Confirms:Gross margin improvement reported above 10% in the next earnings call.
Disproves:Gross margin improvement reported below 5% in the next earnings call.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Why it matters: Better gross margins may show improved cost control and efficiency. These are key goals for management.
Confirms:Gross margin for Q1 2025 exceeds 40.9%.
Disproves:Gross margin for Q1 2025 falls below 38.9%.