Track market-moving stories before they get noisy

Posted by Defense World Staff on Jul 22nd, 2026

Baader Bank Aktiengesellschaft acquired a new stake in shares of onsemi (NASDAQ:ON – Free Report) during the 1st quarter, according to the company in its most recent Form 13F filing with the Securities & Exchange Commission. The institutional investor acquired 7,140 shares of the semiconductor company’s stock, valued at approximately $436,000.

A number of other hedge funds have also recently bought and sold shares of ON. CVA Family Office LLC boosted its position in shares of onsemi by 83.7% in the fourth quarter. CVA Family Office LLC now owns 472 shares of the semiconductor company’s stock worth $26,000 after acquiring an additional 215 shares during the last quarter. Root Financial Partners LLC increased its position in onsemi by 42.1% during the fourth quarter. Root Financial Partners LLC now owns 503 shares of the semiconductor company’s stock worth $27,000 after purchasing an additional 149 shares during the last quarter. DV Equities LLC acquired a new position in onsemi during the fourth quarter worth approximately $30,000. SHP Wealth Management purchased a new position in onsemi during the fourth quarter worth approximately $32,000. Finally, Summit Securities Group LLC boosted its holdings in shares of onsemi by 346.3% in the 4th quarter. Summit Securities Group LLC now owns 598 shares of the semiconductor company’s stock valued at $32,000 after purchasing an additional 464 shares during the last quarter. Institutional investors and hedge funds own 97.70% of the company’s stock.

onsemi Stock Up 5.0% NASDAQ:ON opened at $91.06 on Wednesday. The company has a current ratio of 4.87, a quick ratio of 3.14 and a debt-to-equity ratio of 0.41. The stock has a 50 day moving average of $109.23 and a 200-day moving average of $83.43. The firm has a market capitalization of $35.69 billion, a PE ratio of 64.58, a price-to-earnings-growth ratio of 0.77 and a beta of 2.01. onsemi has a 52 week low of $44.56 and a 52 week high of $134.92.

onsemi (NASDAQ:ON – Get Free Report) last posted its earnings results on Monday, May 4th. The semiconductor company reported $0.64 EPS for the quarter, topping the consensus estimate of $0.61 by $0.03. The firm had revenue of $1.51 billion during the quarter, compared to analysts’ expectations of $1.49 billion. onsemi had a net margin of 9.46% and a return on equity of 12.79%. onsemi’s quarterly revenue was up 4.7% on a year-over-year basis. During the same quarter in the prior year, the firm earned $0.55 EPS. onsemi has set its Q2 2026 guidance at 0.650-0.770 EPS. Analysts predict that onsemi will post 3.09 EPS for the current year.

Analyst Ratings Changes Several equities research analysts have commented on the company. Susquehanna upped their price target on onsemi from $140.00 to $150.00 and gave the stock a “positive” rating in a research note on Thursday, July 9th. Roth Capital reaffirmed a “buy” rating on shares of onsemi in a research note on Tuesday, May 5th. Zacks Research cut onsemi from a “strong-buy” rating to a “hold” rating in a report on Monday, July 6th. Stifel Nicolaus increased their target price on shares of onsemi from $90.00 to $107.00 and gave the stock a “hold” rating in a research report on Wednesday, June 24th. Finally, Wells Fargo & Company cut their price target on shares of onsemi from $140.00 to $130.00 and set an “overweight” rating on the stock in a report on Monday. Fourteen research analysts have rated the stock with a Buy rating, fourteen have assigned a Hold rating and one has given a Sell rating to the company. According to MarketBeat.com, onsemi presently has a consensus rating of “Hold” and an average target price of $102.24.

Check Out Our Latest Stock Report on ON

Insider Activity In related news, CFO Trent Thad sold 30,000 shares of onsemi stock in a transaction dated Thursday, April 23rd. The stock was sold at an average price of $93.00, for a total value of $2,790,000.00. Following the transaction, the chief financial officer owned 301,194 shares of the company’s stock, valued at approximately $28,011,042. This trade represents a 9.06% decrease in their position. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Corporate insiders own 0.35% of the company’s stock.

Key onsemi News Here are the key news stories impacting onsemi this week:

Positive Sentiment: onsemi disclosed $110,000 of Q2 lobbying tied to AI data center power use, CHIPS Act issues, tax policy, and national-security-related technologies, underscoring its exposure to long-term semiconductor demand themes. Positive Sentiment: Analysts remain constructive overall, with recent price targets ranging from $107 to $150 and a median near $115, suggesting Wall Street still sees meaningful upside from current levels. Neutral Sentiment: Pomerantz LLP opened an investigation into claims on behalf of ON investors. This may create some headline risk, but it is an early-stage legal development rather than a formal enforcement action. Neutral Sentiment: Recent insider sales and mixed hedge fund positioning may temper enthusiasm, but these signals are not new and appear to be outweighed today by broader interest in the stock. About onsemi (Free Report)

onsemi is engaged in disruptive innovations and also a supplier of power and analog semiconductors. The firm offers vehicle electrification and safety, sustainable energy grids, industrial automation, and 5G and cloud infrastructure, with a focus on automotive and industrial end-markets. It operates through the following segments: Power Solutions Group, Advanced Solutions Group, and Intelligent Sensing Group. The Power Solutions Group segment offers discrete, module, and semiconductor products that perform multiple application functions, including power switching, power conversion, signal conditioning, circuit protection, signal amplification, and voltage reference functions.

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It's fair to say that ON Semiconductor's (ON 4.82%) $7 billion acquisition of artificial intelligence (AI) edge solutions company Synaptics (SYNA 4.97%) didn't receive a warm welcome from the market. The stock sold off sharply on the announcement and has only recovered slightly since. It's a bold move that needs some explaining, not least because the sell-off could be a great opportunity for investors. Here's why.

ON Semiconductor in 2026 The slump in the share price likely occurred because investors woke up to a fundamentally different company after the deal was announced. The company is best known for its power and sensing chips sold to its key automotive (electric vehicles) and industrial verticals. It also has fast-growing revenue from AI data centers, and its partnership with Nvidia to create power chips for a new generation of data centers promises to accelerate its growth.

Today's Change

(

-4.82

%) $

-4.46

Current Price

$

88.08

In fact, I selected the company as my top stock to buy for 2026 on the basis of a cyclical recovery in its EV and industrial end markets, combined with its AI data center revenue and a highly compelling cash-flow-based valuation.

The company didn't disappoint, nor did its end markets, but with one bound, investors are suddenly faced with a new investment proposition, and it's causing some consternation.

ON Semiconductor's big move The definitive agreement to buy Synaptics suddenly transforms ON Semiconductor from a company with power and sensing technology into one that can also offer connected compute technology. For some real-world examples, consider an industrial robot that needs power and sensors (from ON Semiconductor) to function, but also requires connected computing power (from Synaptics) to operate.

In this sense, the new company will be able to capture more value from physical AI. This is why ON Semiconductor's management describes the deal as an expansion of its capability from AI infrastructure to physical AI. It also believes that acquiring Synaptics will expand its total addressable market (TAM) "by $30 billion to $243 billion by 2030."

Image source: Getty Images.

Numbers backing the deal Management expect the all-stock transaction to add to earnings per share within 18 months of the close. The following estimates were given in the deal presentation.

One key point to note is that buying Synaptics increases profit and gross profit margin. However, Synaptics has lower operating profit margins. That said, management believes it can generate $200 million in synergies (in about 18 months after the deal closes) from the deal, with "probably 85% to 90%" from operating expenses and the rest from cost of goods sold.

In other words, operating profit margin will get a boost from the deal's synergies.

Wall Street Consensus

ON Semiconductor

Synaptics

New Company

Revenue

$6.5 billion

$1.3 billion

$7.8 billion

Gross profit

$2.6 billion

$0.7 billion

$3.3 billion

Margin

40%

54%

42%

Operating profit

$1.4 billion

$0.2 billion

$1.7 billion*

Margin

22%

19%

22%

Data source: ON Semiconductor. *Discrepancy due to rounding.

Is ON Semiconductor stock a buy? There's an obvious concern that the acquisition will represent a leap from the power and sensing technology the company was focused on expanding to edge AI processing, which might not prove easy to execute. In addition, investing in edge AI is not why many holders invested in the stock in the first place.

Although those concerns are understandable, it's worth noting that many investors are focusing on AI infrastructure for model training right now. However, the future of AI is likely to be dominated by inference (running models) at the edge, which is why ON Semiconductor is buying Synaptics.

Image source: Getty Images.

The company already has strong exposure to the theme (robots and autonomous machines need power and sensing technology), and with the addition of the connected computing "brain" from Synaptics, the value added for ON Semiconductor from inference spending will only increase.

All told, it's an early and bold move into the long-term growth market of AI, and that will attract many investors willing to give management the benefit of the doubt over the move. As such, the dip in the share price looks like a decent buying opportunity.

SCOTTSDALE, Ariz., July 16, 2026 (GLOBE NEWSWIRE) -- onsemi (Nasdaq: ON) plans to announce its financial results for the second quarter, which ended July 3, 2026, after market close on Monday, August 3, 2026.

The company will host a conference call at 5 p.m. Eastern Time (ET) on August 3, 2026, following the release of its financial results. Investors and interested parties can access the conference call in the following manner:

Webcast: A live webcast of the conference call will be available via the “Investor Relations” section of the company’s website at http://www.onsemi.com. The re-broadcast of the call will be available at this site approximately one hour following the live broadcast and will remain available for 30 days.
 Teleconference: Investors and interested parties can also access the conference call by pre-registering here. About onsemi

onsemi (Nasdaq:

ON) delivers intelligent power and sensing technologies that enable electrification, energy efficiency, safety, and automation across automotive, industrial, and AI data center end markets. With a highly differentiated and innovative product portfolio, onsemi helps customers solve complex challenges to achieve higher efficiency, improved performance, and lower system cost, while supporting a safer, cleaner, and more energy-efficient world. onsemi is included in the S&P 500® index. Learn more about onsemi at www.onsemi.com.

onsemi and the onsemi logo are trademarks of Semiconductor Components Industries, LLC. All other brand and product names appearing in this document are registered trademarks or trademarks of their respective holders.

Contacts
        
Krystal Heaton
Director, Head of Public Relations
onsemi
(480) 242-6943
[email protected]

Parag Agarwal
Vice President - Investor Relations & Corporate Development
onsemi
(602) 244-3437
[email protected]                                        

NEW YORK, July 14, 2026 (GLOBE NEWSWIRE) -- Pomerantz LLP is investigating claims on behalf of investors of ON Semiconductor Corporation (“Onsemi” or the “Company”) (NASDAQ: ON).  Such investors are advised to contact Danielle Peyton at [email protected] or 646-581-9980, ext. 7980.

The investigation concerns whether Onsemi and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices. 

[Click here for information about joining the class action]

On June 25, 2026, Onsemi announced an agreement to buy the internet-of-things company Synaptics Incorporated (“Synaptics”) in an all-stock transaction.  Pursuant to the terms of the agreement, Synaptics shareholders will receive 1.35 shares of Onsemi stock for each Synaptics share, representing an enterprise value of around $7 billion. 

Following announcement of the agreement, Onsemi’s stock price fell $28.09 per share, or 23.66%, to close at $90.65 per share on June 26, 2026.

Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.

Attorney advertising. Prior results do not guarantee similar outcomes.  

CONTACT:
Danielle Peyton
Pomerantz LLP
[email protected]
646-581-9980 ext. 7980

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ON Semiconductor’s (NASDAQ:ON | ON Price Prediction) rebound has been one of the semiconductor sector’s more dramatic stories of 2026, and our proprietary model still sees room to run. The stock trades at $95.96 after a 77.21% year-to-date rally that cooled from a $134.92 52-week high.

Our 24/7 Wall St. price target for ON Semiconductor is $123.74, implying 28.94% upside over the next 12 months. The model’s rating is buy, with high confidence at 90%.

24/7 Wall St. Price Target Summary Metric Value Current Price $95.96 24/7 Wall St. Price Target $123.74 Upside 28.94% Recommendation BUY Confidence Level 90% From Cyclical Trough to AI Data Center Breakout ON has whipsawed investors. Shares sat at $48.11 last September and ripped to $125.90 by mid-June before pulling back 12.9% over the past month.

Q1 2026 confirmed the inflection: revenue of $1.513 billion topped expectations by 1.72%, non-GAAP EPS of $0.64 exceeded expectations by 4.03%, and non-GAAP gross margin recovered to 38.5% from a depressed 20.3% a year earlier.

CEO Hassane El-Khoury said the business has “moved beyond the cyclical trough on a path to recovery”, with AI data center revenue more than doubling year over year.

Why Bulls See a Breakout Above $133 The bull thesis rests on the AI data center curve and the silicon carbide EV cycle. Q1 AI data center revenue more than doubled YoY and grew more than 30% sequentially, while Power Solutions climbed 14% to $736.6 million.

EliteSiC design wins with Geely, NIO, and Xiaomi position ON for the 900V EV architecture shift, and PineBridge estimates data center equipment demand growing around 25% annually for the next four to five years. Under our bull case, ON reaches $133.10 in 12 months, a 38.7% total return.

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What Could Go Wrong The bear case starts with valuation. ON’s trailing P/E of 71 and forward multiple of 31 leave no cushion. Free cash flow fell 52.23% YoY in Q1, yet ON spent $345.7 million on buybacks, roughly 160% of free cash flow.

Barclays initiated with equal-weight and a $75 target, flagging automotive and China exposure. Bulls counter that the $329.3 million restructuring charge is non-recurring and non-GAAP margins already run near 38.5%. Our bear case still points to $98.65, roughly flat with today’s price.

How ON Compares to NXPI and TXN NXP Semiconductors (NASDAQ:NXPI) is the cleanest automotive-analog comp. NXPI trades at a forward P/E of 20 with a 27.7% operating margin and 12.2% revenue growth. ON’s forward multiple of 31 looks rich against that, but ON’s AI data center exposure is scaling faster.

Texas Instruments (NASDAQ:TXN) sets the industrial-analog benchmark. TXN’s forward P/E of 41 and operating margin of 37.8% show what mature scale looks like. ON sits between the two on multiples, which makes our $123.74 target look reasonable rather than aggressive.

Company Forward P/E Operating Margin ON Semiconductor 31 18.2% NXP Semiconductors 20 27.7% Texas Instruments 41 37.8% Verdict: Model Rates ON a Buy The 24/7 Wall St. price target for ON Semiconductor is $123.74, a buy with 90% model confidence. The tipping factor is margin recovery paired with AI data center acceleration. The bullish setup holds if Q2 delivers within the $0.65 to $0.77 EPS guide. The thesis weakens if free cash flow keeps deteriorating while buybacks continue at 160% of FCF.

Year 24/7 Wall St. Price Target 2026 $123.74 2027 $129.27 2028 $155.71 2029 $184.89 2030 $199.89 These projections assume ON keeps executing on silicon carbide EV design wins and AI data center power. Meaningful upside or downside could come from automotive cycle turns or China policy shifts.

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Onsemi (NASDAQ:ON)'s proposed acquisition of Synaptics could create long-term strategic benefits, with Bank of America writing that a meeting with management increased its confidence in the rationale and potential synergies of the transaction.

The analysts wrote that Synaptics adds highly complementary compute assets to Onsemi (NASDAQ:ON)’s existing strengths in power, sensing and control, supporting the company’s ambition to build a complete edge AI portfolio.

They wrote that acquiring these capabilities through M&A allows Onsemi to accelerate time to market while avoiding the distraction of developing them internally.

Bank of America wrote that the market underappreciates the potential long-term benefits of the transaction, noting that initial cost synergy assumptions of $200 million could underestimate the ultimate savings potential. The analysts added that revenue synergies could also be significant over time as Onsemi cross-sells Synaptics products through its distribution channel.

The analysts wrote that the all-stock transaction preserves Onsemi’s balance sheet flexibility to fund buybacks and invest in new products, including Synaptics’ Astra program. They added that the deal could provide solid EPS accretion above the $7 in long-term EPS power they see for core Onsemi.

Bank of America also highlighted an expanded market opportunity, writing that Onsemi now believes the total addressable market for its core business exceeds $200 billion, compared with $64 billion at its previous analyst day, while Synaptics adds an additional $30 billion.

The analysts wrote that Synaptics’ consumer and enterprise PC exposure could be viewed negatively by investors but noted that these businesses generate gross margins in the high-50% range, above Onsemi’s typical high-40% gross margins.

On artificial intelligence opportunities, Bank of America wrote that Onsemi’s AI data center business is on track to at least double in 2026 from $250 million in 2025. The analysts highlighted the company’s vertical gallium nitride technology, writing that it is differentiated as the only device supporting high frequency and high voltages in a single chip.

The analysts wrote that Onsemi’s core initiatives remain on track, including progress in automotive silicon carbide for China electric vehicles, ethernet and zonal architecture, while industrial segments are recovering as purchasing managers’ indexes move above 50. They also noted that the recent exit of two facilities represents 50 basis points of a targeted 200 basis points of gross margin expansion from Onsemi’s fab restructuring initiatives.

Bank of America maintained its ‘Buy’ rating, writing that Onsemi’s upcoming analyst day could serve as a catalyst.

Shares of Onsemi traded up more than 5% on Thursday afternoon amid a broader rally in chipmaker stocks.

Key Takeaways ON is divesting facilities in the Philippines and Pennsylvania to optimize its manufacturing footprint.ON expects the divestitures to deliver $35M in annual cost savings, fully realized in 2028.AI data center revenues rose more than 30% sequentially in Q1 and are expected to double in 2026. ON Semiconductor (ON - Free Report) or onsemi recently announced an agreement to divest its Tarlac, Philippines, manufacturing facility to Greatek Electronics and its Mountain Top, PA, facility to Silex Microsystems. Management said these actions are designed to optimize onsemi’s manufacturing footprint, direct investments toward the most scalable and competitive fabs, and improve long-term manufacturing economics. Importantly, both transactions include structured transition plans and long-term supply agreements, ensuring uninterrupted customer deliveries while production is gradually transferred across onsemi's remaining network. ON expects these divestitures to generate approximately $35 million in annual cost savings, with benefits beginning in 2027 and fully realized in 2028.

onsemi’s latest divestitures reinforce the company’s Fab Right manufacturing strategy by reducing exposure to less competitive manufacturing assets and concentrating production in higher-efficiency, technology-aligned facilities. Rather than simply shrinking its footprint, onsemi is reshaping its manufacturing network to improve utilization, lower structural costs and support higher-margin products in AI data centers, automotive and industrial markets. Combined with rising AI-related demand and a richer product mix, these initiatives should support more durable gross-margin expansion and stronger long-term profitability.

The latest divestitures are a natural extension of the Fab Right strategy that ON management has emphasized throughout 2026. On the first-quarter earnings call, onsemi highlighted that structural manufacturing changes have already contributed to three consecutive quarters of gross-margin expansion, with non-GAAP gross margin improving to 38.5% despite a challenging demand environment. The company guided for sequential gross-margin expansion through the remainder of 2026, citing ongoing Fab Right initiatives, improved factory utilization and a leaner manufacturing model.

The strategy also complements onsemi’s portfolio transformation. The company has been exiting lower-value products, prioritizing differentiated power and sensing solutions and investing in AI data center power, silicon carbide, gallium nitride, automotive electrification and intelligent sensing. The company’s management has noted that improving backlog visibility, healthier bookings and expanding AI data center demand are allowing onsemi to better leverage its manufacturing base. In the first quarter of 2026, AI data center revenues grew more than 30% sequentially, which the company expects to double year over year in 2026.

ON Faces Tough Competitiononsemi is facing significant competition from the likes of Texas Instruments (TXN - Free Report) and Navitas Semiconductor (NVTS - Free Report) .

Texas Instruments challenges onsemi primarily through scale and manufacturing efficiency. TXN’s $20 billion-plus 300mm capacity buildout, internalization of wafers, shutdown of older 6-inch fabs and rising utilization give it a structurally lower-cost model. Texas Instruments said first-quarter gross margin reached 58%, up 210 basis points (bps) sequentially and 120 bps year over year and implied further improvement as revenue growth, lower capital expenditure intensity and internal wafer production flow through. These factors allow TXN to compete aggressively in analog, embedded, power and data-center sockets while still operating at a far higher margin base.

Navitas is targeting high-power GaN and high-voltage SiC in AI data centers, grid infrastructure, performance computing and industrial electrification. Management said high-power revenues grew strongly, mix is shifting away from mobile, and gross margin improved to 39% (90 bps year over year and 30 bps sequentially) in the first quarter of 2026, with further gradual expansion expected through 2026. Navitas believes that focusing on high-power applications can gradually improve profitability over time because these markets typically carry better pricing and stronger long-term demand visibility.

ON’s Share Price Performance, Valuation & EstimatesShares of onsemi have appreciated 68.2% year to date, outperforming the broader Zacks Computer and Technology sector’s rise of 16.6%.

ON Stock Outperforms Sector
Image Source: Zacks Investment Research

The ON Semiconductor stock is trading at a premium, with a forward 12-month price/earnings of 24.32X, higher than the median of 19.6X. ON has a Value Score of D.

ON’s Valuation
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for ON’s 2026 earnings is currently pegged at $3.09 per share, unchanged over the past 30 days, suggesting 31.5% growth from the 2025 reported figure.
 

On Semiconductor currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NEW YORK, July 07, 2026 (GLOBE NEWSWIRE) -- Pomerantz LLP is investigating claims on behalf of investors of ON Semiconductor Corporation (“Onsemi” or the “Company”) (NASDAQ: ON).  Such investors are advised to contact Danielle Peyton at [email protected] or 646-581-9980, ext. 7980.

The investigation concerns whether Onsemi and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices. 

[Click here for information about joining the class action]

On June 25, 2026, Onsemi announced an agreement to buy the internet-of-things company Synaptics Incorporated (“Synaptics”) in an all-stock transaction.  Pursuant to the terms of the agreement, Synaptics shareholders will receive 1.35 shares of Onsemi stock for each Synaptics share, representing an enterprise value of around $7 billion. 

Following announcement of the agreement, Onsemi’s stock price fell $28.09 per share, or 23.66%, to close at $90.65 per share on June 26, 2026.

Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.

Attorney advertising. Prior results do not guarantee similar outcomes.  

CONTACT:
Danielle Peyton
Pomerantz LLP
[email protected]
646-581-9980 ext. 7980

An Onsemi logo appears in this illustration taken August 25, 2025. REUTERS/Dado Ruvic/Illustration Purchase Licensing Rights, opens new tab

CompaniesJuly 7 (Reuters) - Chipmaker Onsemi (ON.O), opens new tab on Tuesday said it will sell two manufacturing facilities as part of broader push ​to cut costs and boost profit margins.

Shares ‌of the company were down more than 3% in premarket trading. They have gained nearly 75% this year.

Jumpstart your morning with the latest legal news delivered straight to your inbox from The Daily Docket newsletter. Sign up here.

Here are some ​details:

Onsemi makes power and sensing chips used ​in electric vehicles, factories and AI data centers.

The move ⁠is part of its "Fab Right" strategy to cut ​costs, improve efficiency and direct resources toward its most ​competitive and scalable operations, the company said.

Onsemi's facility in Tarlac, Philippines will be sold to Taiwanese chip firm Greatek Electronics, ​which specializes in semiconductor packaging and testing. The ​deal is expected to close in the next three to six ‌months.

Its ⁠Mountain Top, Pennsylvania, site will go to Swedish semiconductor company Silex Microsystems; the transaction is expected to close in January 2028, giving Onsemi time to move production ​to other ​facilities.

The company ⁠did not disclose the financial terms of the deals.

Both sites will keep running ​during their transition periods, and Onsemi has ​agreed ⁠to a long-term supply deal with Greatek to ensure customers are not disrupted.

Together, the sales are expected to ⁠save ​Onsemi around $35 million annually, with initial ​savings beginning in 2027 and the full benefit realized in 2028.

Reporting ​by Anhata Rooprai in Bengaluru; Editing by Sahal Muhammed

Our Standards: The Thomson Reuters Trust Principles., opens new tab

Key Takeaways ON is seeing rising demand for advanced power solutions across AI data centers, EVs and energy storage.AI data center revenues rose more than 30% sequentially in Q1 2026 and are expected to double in 2026.onsemi sees AI rack power content rising to about $115,000 as 800-volt architectures gain adoption. ON Semiconductor (ON - Free Report) or onsemi is benefiting from accelerating demand for advanced power solutions across AI data centers, electric vehicles (EVs), energy storage and industrial applications. The company's differentiated portfolio of silicon carbide (SiC), gallium nitride (GaN), intelligent power modules and analog power management solutions is driving stronger design wins and content growth, positioning it to outpace broader semiconductor demand.

AI infrastructure has emerged as one of ON Semiconductor's strongest growth drivers. In the first quarter of 2026, AI data center revenues increased more than 30% sequentially, nearly double management's expectations, and the company expects AI data center revenues to double year over year in 2026.

ON is benefiting from broader adoption across the entire power tree, with products deployed from high-voltage power conversion and intelligent power stages to system-level power management. The company is engaged with all major hyperscalers, multiple XPU vendors and leading power supply manufacturers, while more than 30 active programs with Flex Power span power supplies, battery backup systems and next-generation 800-volt DC architectures.

The transition to higher-voltage power architectures is significantly expanding onsemi’s content opportunity. Management expects AI racks to migrate to 800-volt designs, wherein ON’s power content per rack could increase from roughly $15,000 today to approximately $115,000, driven by higher adoption of high-voltage silicon carbide and GaN solutions. The company also believes that its proprietary vertical GaN technology and industry-leading 800-volt power conversion capabilities provide a meaningful competitive advantage in delivering higher power density and improved efficiency for next-generation AI infrastructure.

ON Semiconductor continues to benefit from growing electrification trends. The company remains the preferred power supplier for next-generation 900-volt EV platforms in China, where silicon carbide content continues to expand. At the same time, rising AI-related electricity demand is boosting investments in energy storage systems and microgrids. ON expects its energy storage business to grow more than 40% year over year in 2026, supported by differentiated silicon carbide hybrid modules for utility-scale solar inverters, renewable energy and liquid-cooled storage platforms. These diversified power applications reinforce ON Semiconductor's long-term growth prospects.

ON Faces Tough CompetitionOn Semiconductor is facing significant competition from the likes of Texas Instruments (TXN - Free Report) and Navitas Semiconductor (NVTS - Free Report) in the power semiconductors space.

Texas Instruments is gaining traction in the power semiconductor market through broad-based demand across industrial, automotive and AI data center applications. In the first quarter of 2026, analog revenues grew 22% year over year, supported by continued recovery in the industrial markets and accelerating demand from data centers. Data center revenues surged about 90% year over year, while industrial revenues climbed more than 30%, reflecting rising demand for power management, power delivery and analog solutions used in AI infrastructure. The company is also benefiting from long-term secular trends in electrification and AI.

Navitas is gaining momentum by transforming its business toward high-power GaN and SiC solutions for AI infrastructure. The company has shifted away from low-end consumer markets to focus on AI data centers, grid and energy infrastructure, performance computing, and industrial electrification. In the first quarter of 2026, revenues from these high-power markets grew 25% year over year and drove the company's return to sequential revenue growth, with management expecting these businesses to remain the primary growth engine throughout 2026. Navitas is also strengthening its competitive position through differentiated GaN and high-voltage SiC technologies tailored for next-generation AI power architectures.

ON’s Share Price Performance, Valuation & EstimatesShares of onsemi have appreciated 68.4% year to date, outperforming the broader Zacks Computer and Technology sector’s rise of 14.7%.

ON Stock Outperforms Sector
Image Source: Zacks Investment Research

The ON Semiconductor stock is trading at a premium, with a forward 12-month price/earnings of 24.4X compared with the broader sector’s 22.73X. ON has a Value Score of D.

ON’s Valuation
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for ON’s 2026 earnings is currently pegged at $3.09 per share, up 4.4% over the past 60 days, suggesting 31.5% growth from the 2025 reported figure.

On Semiconductor currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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SummaryON Semiconductor is rated Buy, with a systematic accumulation strategy targeting a large upside breakout by 2027–2028.ON’s transformation via the $7B Synaptics acquisition and proprietary Treo platform expands its TAM to $243B by 2030, leveraging leadership in 1200V vertical GaN and SiC technologies.Key catalysts include 10x content growth in 800V AI data center racks, robust margin expansion toward a 53% target, and decoupling from flat global auto SAAR via Chinese EV exports.Major risks center on Synaptics integration, delayed 800V data center retrofits, Chinese SiC ASP deflation, and balance sheet leverage. FTXL ETF offers a diversified proxy for ON exposure. Just_Super/iStock via Getty Images

For ON Semiconductor (ON) stock, I'm marking a Buy rating (accumulate a long position systematically and expand the position on M&A-led weakness to optimize average positional price) as a large upside breakout is highly probable by 2027–2028, as per my thesis.

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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12:37pm: Onsemi (NASDAQ:ON) slides  Onsemi (Onsemi (NASDAQ:ON)) shares fell about 19% on Thursday after the semiconductor company announced an agreement to acquire Synaptics (NASDAQ: SYNA) in an all-stock transaction valued at approximately $7 billion.

Shares of Synaptics added about 3% to about $130 on the news.

Under the terms of the deal, Synaptics shareholders will receive 1.35 shares of Onsemi (Onsemi (NASDAQ:ON)) common stock for each Synaptics share they own, representing an approximately 19% premium to the companies' respective 10-day volume-weighted average closing prices.

Synaptics shareholders are expected to own about 12% of the combined company on a fully diluted basis following the transaction.

Onsemi said the acquisition would expand its focus beyond power and sensing technologies into intelligent systems and edge artificial intelligence applications. The company expects the combination to increase its total addressable market by $30 billion to $243 billion by 2030 and strengthen its position in what it describes as "Physical AI" applications, including autonomous vehicles, robotics and augmented and virtual reality.

11:30am: Stocks bounce back Dip buyers have made their move, sending US stocks higher after a wave of selling. The Dow was up 0.3%, the S&P 500 added 0.2% and the Nasdaq was up 0.1%.

“The recovery is a testament to the staying power of this rally, but holding on to gains has proved problematic throughout the week,” IG chief market analyst Chris Beauchamp said.

“Fortunately the sessions before US Independence Day tend to give bulls the upper hand, potentially shifting the tone next week.”

Meanwhile, oil prices fell back to multi-month lows. Crude prices fell more than 4.5% to below $69 per barrel.

“Dips in stocks get bought, while bounces in oil get sold, and heavily so. Both WTI and Brent teeter on the brink of new multi-month lows as Hormuz shipping continues without much interruption,” Beauchamp said.

10:05am: Tech under pressure US stocks started Friday’s session lower as investors pulled back from tech stocks following the news that OpenAI would delay its IPO until next year.

The Nasdaq was down 0.2% at 25,306 points, the Dow Jones was down 0.1% at 51,880 points, S&P 500 was flat at 7,357 points.

“A rotation is going on in US stocks right now, the weakest performing companies on the S&P 500 include those most closely linked to AI, including Palantir and Oracle, which are down 18% and 16% respectively this week,” said Kathleen Brooks, research director at XTB.

“There are also chunky losses for some of the Magnificent 7, including Microsoft, Alphabet, Apple and Nvidia. The move away from tech heavy AI names is allowing value stocks to shine.”

8:15am: Difficult session in sight US stocks are set for another difficult session on Friday, with the Nasdaq on course for a fifth straight day of losses as investors continue to rotate out of technology shares ahead of the quarter-end.

Nasdaq futures were down 1.2% ahead of the opening bell, while S&P 500 and Dow Jones futures fell 0.5% and 0.1%.

It comes after a mixed session yesterday, as a 6% drop in Apple shares weighed on the Nasdaq, which partially recovered from steep early losses to finish the day down 0.5% at 25,358 points, a collapse of over 1,000 points or 4.1% over the first four days of the week.

The S&P 500 closed almost completely flat at just under 7,358 points, while the Dow Jones added 0.1% at a little under 51,921 points.

This was followed by a bruising overnight session in Asia, where South Korea's Kospi tumbled 5.8% and Japan's Nikkei fell 4.2% as semiconductor and technology stocks sold off sharply.

European markets are also lower, with the technology rout spreading across the region.

The selloff comes despite strong results from memory chipmaker Micron earlier this week

"Concerns are growing over AI-related capital expenditure and just where all the money required for it is going to come from," said market analyst David Morrison at Trade Nation.

"It is becoming clear that even the largest tech behemoths can no longer fund AI development out of their operating cash flow."

Apple dropped 6% on Thursday after warning that higher memory costs would force it to raise prices, while Microsoft fell almost 4% after increasing Xbox prices because of rising component costs.

As we stand just three trading days from the end of the second quarter, Kenny Polcari at Slatestone Wealth said, "this is not what the beginning of a bear market looks like. This is what sector rotation looks like", arguing that investors are taking profits in the biggest winners and reallocating money into industrials, healthcare and other overlooked sectors.

With the equal-weight S&P rising while the main weighted index struggled, Polcari added: "The generals took a hit... the troops kept marching."

Investors were also digesting the latest US inflation data. Core PCE, the Federal Reserve's preferred inflation gauge, rose to its highest level since October 2023, reinforcing expectations that interest rates could remain higher for longer.

Bitcoin staged a modest recovery above $60,000 after briefly falling below $59,000 on Thursday, while oil prices remained volatile amid renewed tensions in the Middle East and uncertainty surrounding OPEC+ production plans.

Onsemi (NASDAQ:ON) shares fell about 19% on Thursday after the semiconductor company announced an agreement to acquire Synaptics (NASDAQ: SYNA) in an all-stock transaction valued at approximately $7 billion.

Shares of Synaptics added about 3% to about $130 on the news.

Under the terms of the deal, Synaptics shareholders will receive 1.35 shares of Onsemi (NASDAQ:ON) common stock for each Synaptics share they own, representing an approximately 19% premium to the companies' respective 10-day volume-weighted average closing prices.

Synaptics shareholders are expected to own about 12% of the combined company on a fully diluted basis following the transaction.

Onsemi said the acquisition would expand its focus beyond power and sensing technologies into intelligent systems and edge artificial intelligence applications. The company expects the combination to increase its total addressable market by $30 billion to $243 billion by 2030 and strengthen its position in what it describes as "Physical AI" applications, including autonomous vehicles, robotics and augmented and virtual reality.

Synaptics brings its Astra Edge AI platform, wireless connectivity technologies and human-machine interface products to the combined business. Onsemi expects the transaction to generate about $200 million in annual synergies and become accretive to non-GAAP earnings per share within 18 months of closing.

The companies expect the deal to close in mid-2027, subject to regulatory approvals, Synaptics shareholder approval and other customary closing conditions.

Both companies reiterated their previously issued financial outlooks for their current quarters.

watch now

ON Semiconductor CEO Hassane El-Khoury defended the company's core business as shares tanked 20% after announcing its largest acquisition to capitalize on physical artificial intelligence.

The maker of power and sensing components for the automotive industry on Thursday announced plans to buy edge AI and wireless connectivity solutions company Synaptics in an all-stock deal.

The pivot into physical AI grows its addressable market by an additional $30 billion, or $243 billion, by 2030, On Semiconductor said in a release.

"That is the strategic value of it, complementary to everything we have done on a very strong foundation," El-Khoury told CNBC's "Squawk on the Street" on Friday.

The acquisition also opens new markets for the company, including an AI-centric compute platform, he said.

On Semiconductor is betting on a world with physical systems capable of sensing and making decisions in real time, such as robots and autonomous vehicles.

Synaptics' Astra platform, which uses AI processors and wireless connectivity, will bolster its Edge AI capabilities, On Semiconductor said. Edge AI refers to running AI locally on hardware.

"There is no overlap on the product, which is why this deal is very exciting from a [research and development] and a product perspective," El-Khoury said.

The executive also told CNBC that the company's data center business is running smoothly and accelerating.

"The foundation that we have built is strong," he said. "We will continue to deliver on that. We have no hesitation about our core business — that remains strong."

ON Semiconductor expects the deal to close in mid-2027 and generate $200 million in annual synergies within 18 months.

Read more CNBC tech newsAmazon's Zoox unveils redesigned robotaxi ahead of upcoming expansionOpenAI unveils first chip as part of Broadcom deal in effort to 'build the full stack'South Korean chipmaker SK Hynix plans to raise $29 billion via Nasdaq listing as soon as July 10Alphabet added to Dow Jones Industrial Average, replacing Verizon

Top Wall Street analysts changed their outlook on these top names. For a complete view of all analyst rating changes, including upgrades and downgrades, please see our analyst ratings page.

Considering buying ON stock? Here’s what analysts think:

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Key Takeaways onsemi appears to offer the better risk-reward balance for EV chip investors.ON leads in SiC and 900-volt EV platforms, with AI data center revenue rising sharply.STM has faster projected earnings growth, but weaker ROIC and a higher valuation. The electrification of transportation continues to create long-term opportunities for semiconductor companies specializing in power management, silicon carbide (SiC), sensors and automotive microcontrollers. As global automakers transition toward electric vehicles (EVs), software-defined vehicles and higher-voltage architectures, suppliers with differentiated automotive chip portfolios are well positioned to benefit. Among the leading players are onsemi (ON - Free Report) and STMicroelectronics N.V. (STM - Free Report) .

Both companies have deep exposure to automotive semiconductors, growing AI-related opportunities and expanding silicon carbide portfolios. Both also delivered encouraging first-quarter 2026 updates that suggest the industry's downturn is easing. Yet their growth strategies, financial profiles and valuation differ meaningfully.

Let's dive deep and closely compare the fundamentals of the two stocks to determine which one is the better investment now.

The Case for onsemi Stockonsemi's investment case increasingly rests on its leadership in intelligent power solutions for electric vehicles and industrial applications. During the first quarter of 2026, management indicated that the company had moved beyond the cyclical trough as demand improved throughout the quarter. Revenues exceeded guidance, while operating leverage remained impressive as year-over-year operating income growth outpaced revenue growth by roughly two times. Gross margin expanded sequentially for the third straight quarter, reflecting benefits from cost optimization and a more focused product portfolio.

The company's automotive franchise remains one of its biggest competitive strengths. onsemi continues to lead the industry's transition toward 900-volt EV architectures through its EliteSiC platform. Expanded collaborations with Geely and NIO reinforce its position among Chinese EV manufacturers, while new traction inverter wins and production shipments of Treo Ethernet solutions support growing adoption of software-defined vehicles. Management also highlighted that silicon carbide solutions powered approximately 55% of new EV models showcased at the 2026 Beijing Auto Show. Beyond EVs, AI data center revenue more than doubled year over year and increased more than 30% sequentially, creating another high-growth driver.

Another important advantage is profitability. Even after the industry downturn, onsemi continues to generate significantly stronger returns on invested capital than most automotive semiconductor peers. Management also continues to aggressively return cash to shareholders through buybacks while maintaining healthy free cash flow.

The challenges largely relate to cyclical automotive demand and continued pricing pressure across portions of the industrial market. Although recovery has started, EV demand remains uneven across regions, and silicon carbide competition continues to intensify. Nevertheless, onsemi appears better positioned because of its disciplined manufacturing strategy, improving operating leverage and growing exposure to AI infrastructure alongside automotive.

The Case for STMicroelectronics StockSTMicroelectronics offers one of the industry's broadest automotive and industrial semiconductor portfolios, spanning power devices, microcontrollers, sensors and analog products. Following a difficult 2025, the company's first-quarter 2026 results suggested demand is steadily improving. Revenues increased 23% year over year, supported by stronger automotive, industrial and personal electronics demand. Distribution inventories have largely normalized, while bookings strengthened across all end markets with book-to-bill comfortably above one.

STMicroelectronics continues to invest aggressively in technologies supporting next-generation mobility. During the quarter, the company secured automotive design wins across electric vehicles, hybrid vehicles and conventional vehicles covering onboard chargers, DC-DC converters, powertrain electronics and vehicle control systems. Its acquisition of NXP's MEMS sensor business also strengthens its automotive sensing capabilities. Meanwhile, management expects AI data center revenues to exceed $500 million during 2026 and surpass $1 billion in 2027, highlighting an emerging growth opportunity beyond automotive. The recently announced collaboration with NVIDIA for robotics further expands its exposure to physical AI.

However, profitability remains a key weakness. Although margins improved from last year, operating margins remain well below historical levels because of restructuring expenses, underutilized manufacturing capacity and ongoing transformation costs. Free cash flow was also temporarily pressured by the NXP MEMS acquisition. While these investments may strengthen long-term competitiveness, investors may need patience before meaningful earnings recovery materializes.

Overall, STMicroelectronics offers stronger near-term revenue growth expectations and broad technology exposure but still faces execution risk as it works through its cost restructuring and manufacturing optimization initiatives.

Momentum Has Been Strong Across the SectorBoth stocks have delivered exceptional returns during 2026 as investors increasingly priced in a recovery across automotive and industrial semiconductors.

onsemi shares have surged 113.8% year to date, while STMicroelectronics stock has climbed an even stronger 177%. Both have comfortably outperformed the Zacks Computer and Technology sector's 15% gain and the S&P 500's 7.5% advance.

ON vs STM Performance (YTD)

Image Source: Zacks Investment Research

The rally also compares favorably with other automotive semiconductor peers such as Texas Instruments (TXN - Free Report) and Microchip Technology (MCHP - Free Report) , reflecting improving investor confidence in the EV semiconductor cycle. Texas Instruments and Microchip Technology gained 74.8% and 45.2% YTD, respectively.

Despite STMicroelectronics' stronger recent price appreciation, onsemi's recovery has been supported by improving fundamentals, expanding AI data center exposure and strengthening automotive demand.

onsemi Delivers Superior Capital EfficiencyReturn on invested capital (ROIC) strongly favors onsemi. Its trailing 12-month ROIC stands at 9.22%, significantly above STMicroelectronics' 1.24%. The higher ROIC reflects onsemi's superior capital allocation, stronger profitability and better operating efficiency, giving it a meaningful competitive advantage despite both companies operating in the same cyclical semiconductor market.

ON vs STM ROIC (TTM)

Image Source: Zacks Investment Research

Valuation Still Favors onsemiDespite both stocks' impressive rallies, valuation continues to favor onsemi. Based on the forward 12-month price-to-earnings ratio, onsemi trades at 31.28X earnings compared with STMicroelectronics at 37.57X. Investors are paying a higher premium for STM despite its lower profitability and weaker ROIC profile.

ON vs STM Valuation (P/E F12M)

Image Source: Zacks Investment Research

Peers such as Texas Instruments and Microchip Technology are trading at 36.98X and 28.55X, respectively. Yet, onsemi offers the more attractive balance between valuation and profitability.

The lower multiple, combined with stronger returns on invested capital and improving operating leverage, gives onsemi a valuation advantage.

ON vs STM: Earnings Estimates Continue Moving HigherAnalysts have become increasingly optimistic about both companies, reflecting improving industry conditions.

Over the past 60 days, the Zacks Consensus Estimate for onsemi's 2026 earnings has increased to $3.09 per share from $2.90. Current estimates imply 31.5% EPS growth on 8% revenue growth for 2026, followed by another 41.1% earnings increase and 10.5% revenue growth in 2027.

Onsemi’s Estimate Revision Trend

Image Source: Zacks Investment Research

For STMicroelectronics, the consensus estimate has risen to $1.17 from $1.09 over the past 30 days. Analysts expect 120.8% EPS growth alongside 21.6% revenue growth in 2026, followed by another 132.5% earnings increase on 15.9% revenue growth during 2027.

STMicroelectronics’ Estimate Revision Trend

Image Source: Zacks Investment Research

Although STM's percentage growth appears much stronger, those gains are being measured from a significantly depressed earnings base following its cyclical downturn. onsemi's estimates reflect healthier underlying profitability and a more consistent earnings profile.

Which EV Chip Stock Is the Better Buy?Both companies are positioned to benefit from rising semiconductor content in electric vehicles, software-defined vehicles and AI-enabled infrastructure. STMicroelectronics offers stronger projected earnings growth as demand recovers, supported by expanding AI programs, automotive design wins and manufacturing investments. However, its lower profitability, weaker ROIC and higher valuation suggest much of that recovery still depends on successful execution.

onsemi appears to offer the better risk-reward balance. The company combines improving automotive demand, leadership in silicon carbide and 900-volt EV platforms, rapidly expanding AI data center exposure, stronger capital efficiency and a more attractive valuation. Importantly, onsemi also carries a more favorable Zacks Rank #2 (Buy) compared with STMicroelectronics' Zacks Rank #3 (Hold). Considering its superior profitability, healthier returns on capital, attractive valuation and stronger earnings quality, onsemi appears to hold better upside potential for long-term investors despite STM's faster near-term earnings rebound. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

SEOUL, South Korea--(BUSINESS WIRE)--RebuilderAI, a company specialising in AI-driven design-to-manufacturing automation, has unveiled its design-to-manufacturing AI agent, VRING:ON, at VivaTech 2026, the global startup and technology fair held in Paris from 17 to 20 June. On the opening day, 17 June, the company drew attention with a stage performance featuring a humanoid robot dressed in an artisan’s design that VRING:ON had recreated from a heritage brand’s archived data.

VRING:ON is an AI agent that automates the core stages of product development, from design concept through 3D modelling to the generation of CAD and engineering data.

Share VRING:ON is an AI agent that automates the core stages of product development, from design concept through 3D modelling to the generation of CAD and engineering data. It is particularly strong with 3D-based hardline products such as eyewear, footwear and jewelry. Rather than merely generating images, it carries an AI-created design seamlessly through 3D modelling, CAD design, mouldability validation and simulation into manufacturing-ready data, producing results that can actually be made.

What sets RebuilderAI apart is its brand-exclusive model architecture. Unlike general-purpose web services that return the same output to anyone, RebuilderAI provides a dedicated AI model tuned to each company’s own data. Its 3D foundation model is trained not only on a brand’s style, materials, production conditions and manufacturing know-how, but also on the archive and heritage it has built over time. Both the training data and the outputs remain the property of that brand. Another key strength is its feedback loop: users can create new agents and continuously refine them through feedback, building a design-assistant AI tailored to their specific needs.

“We tune our AI model to each individual brand to protect the security of that brand’s data and to preserve the distinctiveness of its style,” Jeonghyeon Kim, RebuilderAI CEO said. “With ISO international-standard certification, we provide a stable, enterprise-grade AI model tailored to each company.”

RebuilderAI is also expanding its international commercial footprint. The company has secured investment from Korea’s Naver and Japan’s ASICS Ventures, among others, has joined a Samsung accelerator programme, and has been selected for NVIDIA’s Inception programme, recognition of its 3D engineering capabilities.

Following its participation at VivaTech, RebuilderAI plans to move actively into the European market, supported by a local sales team based in Paris.

The AI infrastructure trade has broadened. NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) still owns the headline, but the second-derivative names that supply connectivity, power, and custom silicon to hyperscalers are where the cleaner setups now sit. Three semiconductor stocks fit that thesis heading into the back half of 2026: each delivered a Q1 2026 beat with raised or strong forward guidance, each carries data-center exposure that the sell side may still be underwriting too conservatively, and each is still early enough in retail discovery that the institutional bid is doing the heavy lifting.

Here are three to keep on the radar in June.

Astera Labs (ALAB) Astera Labs (NASDAQ:ALAB) designs connectivity silicon that solves integration bottlenecks inside AI racks, the plumbing between GPUs, CPUs, and memory. Motley Fool flagged the name in May 2026 as an overlooked AI infrastructure play.

The fundamentals justify the attention. Q1 FY26 revenue hit $308.36 million, up 93% year over year, beating consensus of $292.32 million by 5%. Non-GAAP EPS came in at $0.61 versus the $0.54 estimate, the fourth straight EPS beat. GAAP gross margin expanded to 76%, and operating cash flow surged 610% year over year to $74.6 million. Management guided Q2 revenue to $355 million to $365 million.

CEO Jitendra Mohan tied the quarter to product cycle, saying “revenue growing by 14% sequentially and 93% year-over-year to a record level of $308.4 million, driven by robust demand for our PCIe 6 portfolio.” The bull case sits with the Scorpio X-Series 320-lane Smart Fabric Switch, which targets a $20 billion merchant scale-up market by 2030 with production ramping in the second half of 2026.

One catalyst is already priced in: shares are up 134% year to date and 334% over the past year, helped by NASDAQ-100 index inclusion. Retail discovery is still concentrated: Reddit qualified mentions remain at 1 to 3 per snapshot, with discussion dominated by r/wallstreetbets.

Risk: Hyperscaler concentration and gross margin compression to roughly 73% in Q2 as newer switch products dilute mix. After a parabolic run, the bar for any disappointment is high.

ON Semiconductor (ON) ON Semiconductor (NASDAQ:ON) is the most contrarian name in this group. The auto and industrial overhang dominated the 2025 narrative, masking what is now a credible AI power story. Shares jumped roughly 11% on the day of the Motley Fool article in May 2026 that flagged ON as an under-the-radar AI name.

Q1 FY26 revenue was $1.513 billion, up 5% year over year and beating the $1.49 billion consensus. Non-GAAP EPS came in at 64 cents against a 62-cent estimate, with non-GAAP gross margin recovering to 39% from 20% a year earlier. The breakout: AI data center revenue more than doubled year over year, with sequential growth exceeding 30%, and Power Solutions Group revenue rose 14% year over year to $736.6 million.

CEO Hassane El-Khoury was direct: “We exceeded expectations as demand strengthened through the quarter and we have moved beyond the cyclical trough on a path to recovery. Our AI data center business accelerated, growing more than 30% sequentially.” Q2 revenue guidance of $1.535 billion to $1.635 billion reinforces the trough-recovery view.

Shares are up 133% year to date off the cyclical bottom. The reset gives onsemi a credible second leg through AI power, EV silicon carbide, and 900V architectures with Geely and NIO.

Risk: Q1 absorbed $329.3 million in restructuring and impairment charges, free cash flow halved to $217.2 million, and share repurchases of $345.7 million ran near 160% of free cash flow. Analog and Mixed-Signal Group revenue was still down 5% year over year.

Marvell Technology (MRVL) Marvell Technology (NASDAQ:MRVL) is the AI networking chip play with the most institutional momentum of the three. Q1 FY27 revenue was $2.418 billion, up 28% year over year, with data center revenue of $1.833 billion, or 76% of the total. Non-GAAP EPS was 80 cents, and free cash flow rose 127% year over year to $483.1 million.

The forward guide is the story. Q2 revenue is guided to $2.700 billion plus or minus 5%, implying roughly 35% year-over-year growth. CEO Matt Murphy said: “We are seeing exceptional AI-related bookings, and as a result, we are significantly raising Marvell’s revenue outlook for both fiscal 2027 and fiscal 2028.” The product breadth, 800G and 1.6T optics, 51.2T Ethernet switches, NPO and CPO scale-up optical, DCI modules, and custom XPU silicon, plus the Celestial AI and XConn Technologies acquisitions closed in February 2026, widens the moat.

Reddit traders are starting to circle the name around S&P 500 inclusion on June 22, but qualified mentions are still running just one per 24-hour period. Shares are up 264% year to date.

Risk: Customer concentration in data center, integration risk on Celestial AI and XConn, and a $331.8 million contingent consideration charge in the quarter. Any hyperscaler insourcing of custom silicon would hit Marvell hardest.

What to watch next The setup heading into Q2 earnings reports is the same across all three: AI data center demand acceleration into a Wall Street consensus that has been chasing rather than anticipating the results. Keep an eye on the next earnings reports, hyperscaler capex revisions, and any signs of customer insourcing. The window for getting ahead of consensus narrows with each beat.

onsemi ON has quietly become one of the semiconductor sector's strongest performers in 2026. The stock has surged 115.7% year to date, significantly outperforming the Zacks Semiconductor – Analog and Mixed industry's 65% gain and the S&P 500's 8.6% advance.

onsemi (NASDAQ:ON | ON Price Prediction) has staged a remarkable comeback in the semiconductor sector this year, and our proprietary model says the rally has room to run. After bottoming below $41 last spring, the stock has reclaimed the $100 handle as investors price in a cyclical recovery and AI data center power demand.

Our 24/7 Wall St. Price Target for onsemi The stock trades at $106.02 as of May 19, 2026. Our 24/7 Wall St. price target for onsemi is $133.41, implying 25.84% upside over the next 12 months. We rate shares a buy with 90% confidence.

Metric Value Current Price $106.02 24/7 Wall St. Price Target $133.41 Upside 25.84% Recommendation BUY Confidence Level 90% From $44 to $106 in a Year Shares are up 141.83% over the past year and 95.79% year to date, with a 27.72% one-month surge powering the move. The stock sits roughly 13% below its 52-week high of $119.10, well above the $40.62 low.

Q4 2025 delivered non-GAAP EPS of $0.64 on revenue of $1,530.1M, beating EPS estimates while narrowly missing expectations on the top line. Full-year free cash flow hit a record $1,418.6M, and management authorized a new $6B buyback over three years.

The Case for $148 and Beyond Bulls see onsemi as a leveraged play on vehicle electrification, AI data center power, and industrial automation. The launch of vertical GaN (vGaN) power semiconductors, the MoU with Innoscience for 200mm GaN-on-silicon, and the GlobalFoundries collaboration on 650V GaN position the company at the cutting edge of next-generation power. The EliteSiC M3e design win inside Xiaomi’s EV SUV underscores automotive traction.

The bull scenario points to $148.38 over the next year, a 39.95% total return, if gross margins re-expand toward 42% and Power Solutions returns to growth.

What Could Go Wrong The bear case starts with valuation. The P/E sits at 340, and implied forward P/E is 45. FY2025 net income collapsed 92.31% to $121M, and all three segments declined double digits in Q4. Barclays initiated coverage at equal-weight with a $75 price target, citing automotive and China exposure.

GAAP earnings were distorted by $666.9M in restructuring and impairment charges tied to manufacturing right-sizing. Bulls argue these one-time hits mask underlying cash generation, evidenced by FCF margin expanding to 23.6% of revenue. The bear scenario sees shares fading to $104.35 if cyclical recovery slips.

I’d Buy It Here The 24/7 Wall St. price target of $133.41 reflects a buy with 90% confidence. Record free cash flow funding a $6B buyback while the cycle inflects upward supports the thesis.

I would be a buyer if Q1 2026 lands inside the guided $1.435B to $1.535B revenue range with gross margins above 38%. I would stay sidelined if automotive bookings weaken or China demand rolls over. The risk-reward leans constructive.

Here is where our model projects onsemi could trade, assuming current growth trajectories hold.

Year 24/7 Wall St. Price Target 2026 $133.41 2027 $152.00 2028 $172.50 2029 $189.00 2030 $207.98 These projections assume onsemi continues executing on GaN and SiC leadership. Significant upside or downside could come from AI data center power adoption rates and the depth of any renewed automotive softness.

Key Takeaways NXP is benefiting from demand for software-defined vehicles and advanced networking solutions.NXPI expects 2026 sales and EPS growth of 14.3% and 25.1%, outpacing ON forecasts.ON is gaining traction in EV power solutions, AI data centers and zonal vehicle platforms. As the automotive industry accelerates toward electric vehicles, advanced driver-assistance systems and smarter in-car technologies, semiconductor companies supplying these critical components are gaining increased investor attention.

ON Semiconductor Corporation (ON - Free Report) and NXP Semiconductors N.V. (NXPI - Free Report) are among the key players benefiting from this trend, thanks to their strong exposure to the fast-growing automotive chip market. While ON is capitalizing on rising demand for power and sensing solutions in EVs, NXP continues to strengthen its position in vehicle connectivity, radar and embedded processing. With both stocks offering distinct growth opportunities, investors may now be wondering which automotive chip company presents the better buying opportunity in the current market environment.

The Case for ONON Semiconductor is strengthening position in the automotive chip market by expanding its exposure to electric vehicles and next-generation vehicle architectures. The company is benefiting from rising demand for silicon carbide solutions, which are increasingly being used in EV powertrains to improve charging speed, energy efficiency and driving range.

Management highlighted that ON already has a strong presence in China’s fast-growing EV market, with its silicon carbide technology featured in a significant portion of new EV models showcased at the 2026 Beijing Auto Show. The company is also expanding partnerships with automakers such as Geely and NIO, reinforcing its role in advanced EV platforms.

Another positive for ON is its increasing traction in software-defined vehicles and zonal architecture. The company’s Treo platform is gaining momentum across automotive and industrial applications, helping it secure new design wins with major customers.

During the first quarter, ON began production shipments of its Ethernet solutions for a North American automaker’s next-generation zonal architecture. These products support faster in-vehicle communication and centralized computing systems, both of which are becoming essential for modern connected cars. Management also noted that Treo products carry attractive margin potential, which could support long-term profitability as adoption rises.

ON is also benefiting from improving business fundamentals and expanding opportunities beyond automotive. The company reported strong momentum in AI data centers, with revenues surging sequentially as broader adoption of power infrastructure drove broader adoption across the power infrastructure market.

Management expects AI data center revenues to double this year as ON leverages its broad portfolio of power technologies across hyperscaler and XPU platforms. At the same time, the company continues to improve margins through portfolio optimization, manufacturing efficiency and cost-control initiatives. These factors position ON to generate stronger operating leverage and sustainable earnings growth as demand recovers across its core markets.

The Case for NXPINXP Semiconductors continues to strengthen its automotive leadership through the growing exposure to software-defined vehicles and advanced vehicle networking. The company is benefiting from rising demand for its S32 processing platforms, automotive Ethernet solutions and imaging radar products, all of which are becoming increasingly important as automakers shift toward centralized computing architectures.

Management noted that these next-generation automotive programs are expanding NXPI’s semiconductor content per vehicle while deepening long-term relationships with customers. The company is also seeing strong traction in China, where faster adoption of advanced vehicle architectures is creating additional opportunities for its high-performance automotive processors and connectivity solutions.

Another major strength for NXPI is its growing industrial and edge AI business. The company reported strong momentum in industrial automation, robotics, energy storage and connected edge devices, supported by increasing adoption of its newer processing platforms such as i.MX, RT and MCX. Management believes the rise of physical AI and intelligent edge computing will drive higher demand for processing power, connectivity and security solutions, areas where NXPI already has an established position. The company also highlighted growing customer commitments tied to AI-enabled industrial systems, which should support durable long-term growth across its industrial and IoT portfolio.

NXPI is also emerging as a stronger player in data center infrastructure, an area investors may have previously overlooked. The company expects its data center-related revenues to more than double this year as it gains traction in system cooling, power supply management, networking control and board management applications.

Unlike companies focused directly on GPUs or accelerators, NXP is targeting the control and power management layers of AI data centers, where reliability, security and long product life cycles are critical. Alongside these growth opportunities, the company continues to benefit from margin expansion, disciplined cost management and strong customer adoption of its differentiated semiconductor portfolio, supporting confidence in its long-term growth outlook.

How Does the Zacks Consensus Estimate Compare for ON & NXPI?The Zacks Consensus Estimate for ON’s 2026 sales implies an 8% year-over-year increase. The consensus estimate for earnings per share for 2026 is $3.09, compared with $2.35 reported in 2025. Earnings estimates for the current year have increased in the past 30 days.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for NXPI’s 2026 sales and EPS implies year-over-year growth of 14.3% and 25.1%, respectively. Earnings estimates for 2026 have increased in the past 30 days.

Image Source: Zacks Investment Research

Price Performance & ValuationON stock has surged 134.1% in the past six months compared with the S&P 500’s growth of 10.2%. Conversely, NXPI’s shares have risen 63.4% in the same time frame.

Price Performance
Image Source: Zacks Investment Research

ON is trading at a forward 12-month price-to-sales ratio of 6.75X, above its median of 3.61X over the last year. NXPI’s forward sales multiple sits at 5.48X, up from its median of 4.31X over the same time frame.

P/S (F12M)
Image Source: Zacks Investment Research

End NotesON Semiconductor and NXP Semiconductors are well-positioned to benefit from the growing adoption of electric vehicles, software-defined vehicles and AI-driven infrastructure, making both attractive choices for long-term investors. ON appears stronger in power semiconductors, silicon carbide adoption and EV-related growth, while NXPI holds a broader leadership position in automotive processing, connectivity and industrial edge computing. With the stronger stock momentum, ON currently has greater leverage to the EV transition, but NXPI offers a more diversified business model with improved exposure to industrial AI and data center infrastructure.

Overall, NXPI seems slightly ahead because of its broader portfolio strength, accelerating company-specific growth drivers and stronger earnings outlook, making the stock a more balanced long-term investment option for investors seeking stability along with growth potential. However, growth-focused investors with a higher risk appetite may still find ON attractive due to its stronger momentum in EV power solutions. Both stocks currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It's time to revisit the investment case for ON Semiconductor (ON +0.80%). The stock is up 114% year to date as I write, and many of the factors that made it a top stock to buy for 2026 remain in place today. However, valuations still matter, so is ON Semiconductor still a great stock for long-term investors? I think the answer is yes, and here's why.

The company's silicon carbide (SiC) and gallium nitride (GaN) power and sensing chips make it a leading player in the electrification of the economy. SiC and GaN possess properties that make them ideal for use in high-voltage and high-switching applications.

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Going into 2026, the case for buying the stock was based on the near-term catalyst of the company passing an inflection point in both its automotive (electric vehicles, or EVs) and industrial end markets (such as factory automation). In addition, the company has a small but rapidly growing exposure to data centers (revenue up 30% sequentially in the first quarter), not least through its partnership with Nvidia to create chips for a new high-voltage class of AI data centers.

The chart below shows how the company has now returned to year-over-year growth, with all three of its end markets reporting growth. For reference, data center revenue is reported under "other" revenue.

Data source: ON Semiconductor presentations. Chart by the author.

The long-term growth case for ON Semiconductor The good news is that investors can expect revenue growth based on its exposure to the EV market. For example, CEO Hassane El Khoury disclosed that its "silicon carbide share of new EV models deployed at the 2026 Beijing Auto Show in April is approximately 55%," and he expects the company's "AI data center revenue to double year over year in 2026." AI spending is also supporting growth in the industrial sector's energy storage revenue, and ON Semiconductor has long-term exposure to growth in renewable energy and factory automation.

Valuation matters Revenue growth is extremely important for a business like ON Semiconductor because it has relatively high fixed costs, so when revenue increases, more of it tends to flow through to profits. The key metric to follow is manufacturing utilization (output divided by full-capacity output), which El Khoury said increased to 77% in the first quarter.

Image source: Getty Images.

CFO Thad Trent believes a low 90% utilization represents "fully utilized," and the company will get there with a 25%-30% revenue increase in the coming years. That increased utilization will result in significant margin expansion before the company even needs to invest in expanding capacity.

Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends ON Semiconductor. The Motley Fool has a disclosure policy.

Key Takeaways ON's Q1 2026 gross margin rose to 38.5%, its third straight sequential expansion.ON's AI data center revenues more than doubled YoY and rose 30% sequentially; seen doubling in 2026.ON cites utilization, Fab Right, mix, Treo and EliteSiC as levers toward a 50% margin goal. ON Semiconductor Corporation (ON - Free Report) continued to make progress on profitability in the first quarter of 2026, delivering its third consecutive quarter of sequential gross margin expansion despite a still-recovering demand environment. The company reported a gross margin of 38.5%, up from 38.2% in the fourth quarter of 2025, supported by manufacturing optimization under its Fab Right strategy, higher utilization and a richer product mix tied to AI data centers, automotive electrification and intelligent power.

AI data center revenues were a standout, more than doubling year over year and rising over 30% sequentially, reflecting broader adoption across the power tree with XPU vendors, power supply providers and leading hyperscalers. Management now expects AI data center revenues to double in 2026, strengthening the case for margin-accretive growth.

The company also highlighted several levers that could support its long-term gross margin target of more than 50%. Each point of factory utilization improvement could add 25-30 basis points to gross margin, while Fab Right initiatives and favorable mix could each contribute roughly 200 basis points over time. Treo, ON Semiconductor’s analog mixed-signal platform, is another important driver, given its expected 60-70% gross margin profile.

EliteSiC remains central to the margin story as EV makers shift toward 900V architectures. Expanded collaborations with Geely and NIO reinforce ON Semiconductor’s position in higher-voltage EV systems, where silicon carbide products typically offer stronger profitability. The company’s China automotive revenues grew year over year in the first quarter despite weakness in the broader China passenger vehicle market, underscoring content gains and share opportunities.

Overall, ON’s margin expansion story is gaining credibility. While the 50% gross margin target remains a multi-year objective rather than a near-term milestone, the latest results suggest that the company’s transformation strategy is moving in the right direction.

Key Competitors to Watch in the Power Semiconductor MarketTwo important competitors to monitor in the broader analog, industrial and power semiconductor landscape are Texas Instruments Incorporated (TXN - Free Report) and STMicroelectronics N.V. (STM - Free Report) .

Texas Instruments remains one of the strongest competitors in analog and embedded processing chips, particularly across industrial automation, automotive electronics and data center power management. TXN has spent the past several years aggressively expanding internal manufacturing capacity and 300-millimeter wafer production, positioning itself to support customers during the current semiconductor recovery cycle. Management recently highlighted growing market-share gains driven by improved supply availability, competitive pricing and stable lead times.

STMicroelectronics, meanwhile, continues strengthening its position in automotive power semiconductors, silicon carbide solutions and AI infrastructure applications. The company reported strong momentum in electric vehicle power systems, industrial automation and AI-related data center programs, including collaborations tied to NVIDIA and Amazon Web Services. STMicroelectronics is also expanding its silicon carbide and optical interconnect capabilities to support next-generation AI compute infrastructure and higher-voltage EV architectures.

ON’s Price Performance, Valuation & EstimatesShares of ON Semiconductor surged 190.9% over the past year compared with the industry’s 111.2% rise.

ON’s One-Year Price Performance

Image Source: Zacks Investment Research

From a valuation standpoint, ON trades at a forward price-to-earnings (P/E) multiple of 34.67, down from the industry’s average of 35.82.

ON’s P/E Ratio (Forward 12-Month) vs. Industry

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for ON’s 2026 earnings per share has increased in the past 30 days. The company is likely to report strong earnings, with projections indicating a 31.5% year-over-year rise in 2026.

Image Source: Zacks Investment Research

ON Semiconductor currently holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Micron Technology (MU), Sandisk (SNDK), Dell Technologies (DELL), Arm Holdings (ARM) and On Semiconductor (ON) received price-target increases from Mizuho Secur

Top Stock for AI’s Next Megatrend: Infineon The development of AI data centers has pushed the limits of the industry in several categories. For instance, capex keeps increasing, as infrastructure expands. Energy might be one of the sectors with the fastest growth. Normally it grows at a steady pace, nonetheless to keep up with the enormous energy needs, the sector is expected to double by 2030. In fact, experts estimate that the demand will reach 950 TWh. Under conservative estimates that is around 120 GW of additional electricity capacity. Energy demand is expected to grow progressively. Companies that provide energy efficient solutions for the buildout are likely to benefit from the expected growth.  Although generation is a big part of the energy value chain; however, distribution, transformation, and efficient power conversion are where companies such as Infineon Technologies ($IFNNY) play a critical role. 

Infineon Infineon is a German semiconductor company founded in 1999 as a spinoff from Siemens. The company is the global leader in power semiconductors and has a market share of around 17%, above companies such as OnSemi (ON) and STMicro (STM). Its products are used across a wide range of applications, the most relevant being the automotive sector. Infineon is a leader across major power semiconductor technologies, including silicon (Si), silicon carbide (SiC), and gallium nitride (GaN) power devices. 

The automotive EV sector has faced significant challenges in recent years, due to the slowdown in EV demand and broader weakness in the automotive market. The automotive segment represents 50% of the company’s revenue, while the energy sector accounts for 29%. In fact, data center-related revenue accounts for approximately 8% of total revenue.

Infineon has a broad product portfolio, which includes several discrete power MOSFET families such as IGBTs, MOSFETs, SiC and GaN power transistors. Infineon’s products are vertically integrated for power solutions, not limited to transistor-level solutions. The company also provides microcontrollers used to manage these power solutions, embedded security solutions and low-level software for its products.

The company is a tier 2 provider to companies across the automotive, industrial and energy sectors. Essentially, Infineon supplies the semiconductors for the development of several products. For instance, in the automotive space, the company has components for EV inverter solutions. Infineon’s expertise in automotive has expanded to the energy sector. To illustrate, in the energy sector its applications extend across several categories such as Solid State Transformers (SST), Power Regulators, Uninterruptible Power Supply (UPS-ESS), Solid State Circuit Breaker (SSCB), battery management systems (BMS) and several other categories in server rack power distribution technologies. In fact, companies such as Delta Electronics and SolarEdge have collaborated closely with Infineon to codevelop power solutions for data centers.  

The company is vertically integrated, holds research and development centers and semiconductor fabs. Moreover, the deep integration between research and manufacturing enables the company to design products that are at least 15% more efficient than competitors, not only because of design and fabrication techniques, but also due to its advanced packaging technologies. In addition, the company claims to have the largest and most efficient SiC power semiconductor fab in the world.

Power electronics and the cumulative effect on efficiency Power generation is arguably the most discussed topic in the energy sector. Mostly the discussion centers around what is the most efficient way of producing energy. In fact, efficiency starts to have a snowball effect as the required energy use increases. For instance, a 40%-efficient energy source, such as combustion engine based electricity generation, with a required output of 100 MW for a data center, would require an installed capacity of 250 MW just to balance the loss in efficiency. Power losses increase the need for thermal dissipation because most of the lost 150 MW is ultimately released as heat. Cooling systems required to dissipate this heat also consume additional electricity.

Data centers and the new dc voltage standard In the last generation of Nvidia GPUs, NVIDIA’s Rubin architecture, 800 volts DC is the norm, and the whole so-called AI factory ecosystem will be based on such power needs. NVIDIA adopted the standard to reduce power losses in data centers. By moving from the previous 48 V DC architecture to 800 V DC, the required current can be reduced by a factor of 16. This change can lower resistive losses by nearly 280 times. Power efficiency is becoming increasingly crucial as rack-level energy consumption continues to grow. A CPU based server rack can be between 20 and 80 kW. Vera Rubin-based GPU servers can reach up to 600 kW per rack. In this kind of rack, each percentage point of efficiency represents roughly 6 kW. Energy losses directly translate to higher operating costs. 

The voltage transformations and power electronics Power electronics refers to electronic systems used for the control and conversion of electric power. Today, power electronics use active components such as SiC MOSFET or GaN MOSFET transistors. Compared to traditional approaches with passive electronic components, power electronics tend to be more efficient and have reduced weight. Power electronics are used to convert between AC and DC, referred to as rectifiers, inverters, or converters.

As power electronics offer control and higher efficiency in the electric power conversion, several traditional products such as transformers are being replaced by solid state transformers. architectures based on power electronics.

Efficiency is critical Moreover, power generation is only one part of the puzzle. To meet growing demand, companies must also distribute, transform, and deliver electricity into server racks. Each step must be power efficient, as the losses cascade. Even at 99% of efficiency, 10 sequential conversion stages end up with an overall efficiency of 90.4%. At envisioned GW-scale data centers, this translates to 100 MW losses per GW.  In fact, the current overall efficiency of a data center is 85%, while with Infineon solutions it could potentially increase toward 90%. 

Infineon’s role in the power distribution future Infineon envisions deploying its products across the entire AI power delivery chain. The company targets applications from 800 V rack-level distribution to point-of-load regulation at the silicon level. Its solutions aim to enable efficient multi-stage power conversion throughout the system. Product families like Infineon’s Silicon carbide CoolSiC™ MOSFETs claim efficiencies between 97-99.5%, while its GaN-based CoolGaN™ can reach similar efficiencies. Both technologies are essential as discrete components for several power solutions.

Broad category of solutions by Infineon in the AI data center era

Infineon envisions a future in which the server rack reaches up to 1 MW. This will require several power solutions, including voltage step-down, cooling solutions, battery storage solutions, super capacitor solutions, and voltage bus distribution. 

Evolution of the server rack in the AI era

Micro grids Finally, Infineon envisions its products playing a key role in upcoming microgrid power architectures. Microgrids are becoming an important enabler for integrating multiple energy sources, including renewables, nuclear, and traditional combustion-based generation. These systems could efficiently distribute  power across the future AI server racks while providing a scalable and future-proof solution for the evolving data center energy demands. Such demands may include different voltage levels, active power quality management, bidirectional power flow, and highly efficient multi-stage power conversion.

Microgrid architecture  in the AI data center era

Earnings and current valuation of the company In the last fiscal year, Infineon reported revenue of €14.6B, representing a 2% YoY decline. Approximately 50% of total revenue came from the automotive segment, while around 16% was related to data centers and power infrastructure applications. Notably, power infrastructure revenue increased from 6% to 8% of total company revenue during the last quarter.

Management expects significant long-term growth opportunities across energy generation, storage, and power conversion infrastructure. In particular, the company views SiC power semiconductors as one of its most attractive growth areas, driven by increasing power density and efficiency requirements in renewable energy systems.

In solar infrastructure applications, Infineon estimates SiC content between €1,500 and €5,000 per MW. The company expects annual demand growth of approximately 17%. For battery energy storage systems, Infineon estimates SiC content between €2,500 and €3,500 per MW. 

Additionally, management highlighted that energy storage systems could represent BOM opportunities exceeding €2,500 per MW, further reinforcing the long-term growth potential of power semiconductors in next-generation energy infrastructure. Moreover, growing demand from AI server infrastructure is expected to turn Infineon’s Power & Sensor Systems division into one of the company’s fastest-growing business segments. The division, which primarily serves AI server and power delivery applications, is expected to grow from approximately €1.5B in revenue in 2026 to around €2.5B in 2027, representing roughly 67% YoY growth.

Future expectations Looking further ahead, management estimates that the opportunity in AI power infrastructure could reach up to €12B by the end of the decade. Equivalent to nearly 85% of the company’s current annual revenue. Infineon expects its semiconductor and power management content per AI server rack to increase substantially. The company estimates growth from roughly €15K today to more than €100K per rack by the end of the decade.
Rapidly growing rack-level power consumption mainly drives this increase. Next-generation AI racks could approach 1 MW of power demand.

BOM content in a server rack  in the AI data center era

Customers Infineon is a diversified company and counts several industry leaders among its customers. Bloom Energy (BE), Delta Electronics (2308.TW) and SolarEdge (SEDG) are some of the relevant customers in the energy generation and distribution steps, key to the AI data center buildout. 

Author’s opinion In conclusion, Infineon Technologies is a key enabler of next-generation power and intelligent infrastructure systems. Its collaborations across the power electronics ecosystem reinforce the company’s relevance in the evolving energy and AI infrastructure landscape.

Although the automotive sector, particularly electric vehicles, has faced a weaker environment in recent years, it has also pushed Infineon to adapt. As a result, the company has further strengthened and expanded its power electronics capabilities. The demanding requirements of automotive applications have helped the company develop highly reliable and efficient solutions. These solutions include power semiconductors, battery management, and energy conversion systems. The company uses this technical expertise to expand its market share in the energy industry.

Management has highlighted strong long-term demand for power generation, distribution, and conversion infrastructure for AI data centers. The company expects this demand to grow significantly by the end of the decade. Infineon believes the data center power architecture opportunity could equal around 85% of its current annual revenue.

Beyond power semiconductors, Infineon has a strong presence in sensors, microcontrollers, and embedded software. All with strategic value for the emerging physical AI era. Finally, the company already develops encryption chips for the post-quantum computing era.

Another important strength is its diversification. Unlike many semiconductor companies with heavy customer concentration, no single customer accounts for more than 10% of Infineon’s total revenue. 

Infineon is one of the leading suppliers of power electronics. These technologies are becoming increasingly important as AI infrastructure requires much higher energy consumption. That is why I consider it a top stock in the next megatrend.