ON Semiconductor (ON) Stock Forecast & Price Target

ON Semiconductor is supported by strengthening demand in industrial and AI data center markets, with AI DC revenue up nearly 40% Q/Q, 2026 revenue guided to about $620 million, and a longer-term target now above $3 billion by 2030 after the Ferric acquisition. The company is also improving its gross margin profile through higher utilization, better product mix, and pricing, with Q3 sales of $1.722 billion, gross margin of 41.2%, and EPS of $0.90 all modestly above consensus. Although automotive remains a near-term drag, the fab-right, vertically integrated model and declining inventories suggest capital-efficient earnings recovery, while industrial sales and distribution strength point to broader cyclical momentum.

ON Semiconductor is facing a weak fundamental setup because its automotive business is underperforming peers, with auto revenue missing consensus by about 3% in Q3 and expected to decline another HSD q/q in Q4, even as supply is reallocated toward AI datacenter demand. Elevated inventory at roughly 186 days and revenues still below levels needed to fully eliminate underutilization suggest operating leverage is not yet sustainable, while its in-house manufacturing model leaves earnings exposed if the cyclical semiconductor downturn or inventory correction persists. Although the company is transforming toward an “IP first” strategy and improving in datacenter, the disconnect in auto, severe pricing pressure in parts of the market, and dependence on global vehicle production create too much near- to medium-term uncertainty.