NASDAQInformation TechnologySemiconductorsSnapshot 2026-08-31
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Create your account →Broken: Primary pillar broken — Grow revenue in automotive, industrial, and AI data center markets: Q2 rev $1.6B vs $1.58B target.
ON Semiconductor aims to grow in automotive, industrial, and AI markets. Revenue was $1.513B in 2026-Q1. They plan to improve gross margin to about 38.9% next quarter. The company returned $1.4B to shareholders in 2025 by buying back shares.
Revenue and profit margins have fallen over the past year. Operating income dropped from $408M to a loss of $53M. Pricing issues may slow market growth. Leadership changes add uncertainty.
The price is about 5% above our fair value near $89. Analysts expect 12% revenue growth. Our fair value is 26% below the Street median, showing some caution.
Breaks if: share repurchases fall below $1.4B in 2026
Continue disciplined capital allocation by returning cash to shareholders through share repurchase programs.
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a durable compounder with a focus on expanding into high-growth markets. The current thesis state is intact, supported by robust earnings quality and management's commitment to capital return and operational excellence.
The market appears to have a neutral valuation, with ON priced relatively cheap compared to peers. There is an expectations gap, indicating that the market may not fully reflect the potential upside from management's growth initiatives.
Fundamentals are likely to show continued growth, particularly in the AI data center segment, which management expects to double in revenue. The near-term risk is low for missing estimates, although there is a history of misses that investors should keep in mind.
The thesis hinges on the performance of sector bellwethers like NVDA, TSM, and AVGO. Favorable earnings and guidance from these companies could enhance ON's momentum, while negative trends could pose risks to its growth outlook.
The most important moves since the prior daily snapshot.
Yes, our read has strengthened. The latest earnings beat supports this improved outlook. There are no new threats identified that would weaken the thesis.
as of 2026-08-31
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Stated as a priority in 5 of last 5 quarters. Share repurchases totaled $346M in 2026-Q1 and $332M in 2026-Q2, with year-to-date repurchases approximately 105% of free cash flow by 2026-Q2. Management consistently emphasizes capital return, and financials show delivering on repurchase commitments.
“Share repurchases of $332 million, bringing year-to-date shareholder returns to approximately 105% of free cash flow.”
“Share repurchases of $346 million, representing approximately 160% of free cash flow.”
“Returned $1.4 billion of 2025 free cash flow through share repurchases.”
“Year-to-date share repurchases of $925 million, approximately 100% of free cash flow.”
“Returned over 100% of free cash flow year-to-date through share repurchases.”
Breaks if: gross margin falls below 37.9% in 2026-Q2
Focus on improving gross margins and operational efficiency through cost discipline and restructuring.
Stated as a priority in 5 of last 5 quarters. Gross margin improved from 37.6% in 2025-Q2 to 38.4% in 2026-Q2, and operating income increased from $170.3M to $258.6M over the same period. Management consistently highlights margin expansion and cost discipline, with financials showing delivering operational improvements.
“Earnings per share grew four times faster than revenue, driven by gross margin expansion and disciplined cost management.”
“Delivered strong operating leverage with a 10% year-over-year increase in operating income, outpacing revenue growth by 2x.”
“Focus remains on operational excellence and margin expansion.”
“We are expanding our offering to deliver system-level value that enables customers to achieve more with less power.”
“Ongoing transformation resulting in a more predictable business model reflecting strength of strategy and commitment to long-term value creation.”
Breaks if: revenue falls below $1.513B in 2026-Q2
Grow revenue and market share in automotive, industrial, and AI data center end-markets through product innovation and strategic partnerships.
Stated as a priority in 5 of last 5 quarters. Revenue grew from $1,468.7M in 2025-Q2 to $1,603.5M in 2026-Q2 (+9%). Management highlighted AI data center as fastest-growing, expecting revenue to more than double in 2026. The trajectory shows delivering growth aligned with stated market expansion focus.
“AI data center remains our fastest-growing business, and we now expect revenue to more than double in 2026.”
“AI data center revenue more than doubled year-over-year due to broader adoption across the power tree.”
“We continue to invest in intelligent power and sensing technologies that position us to win in automotive, industrial, and AI data center.”
“We’re seeing continued signs of stabilization and positive growth in AI.”
“We are positioning the company for long-term growth through investments in next-generation technologies.”
Overall, ON's multi-year view remains positive, driven by its strategic priorities and market positioning. Not investment advice.
