ON Semiconductor Stock: Is Wall Street Too Bearish After The AI Reset?

ON Semiconductor has been punished as EV and smartphone demand cools, but new AI, automotive and power deals are quietly building. Has Wall Street already priced in the bad news, leaving upside for patient US investors?

Bottom line for your portfolio: ON Semiconductor stock has been caught in a painful reset as the EV and industrial chip boom cools, yet management is doubling down on higher-margin silicon carbide and AI data center power solutions. If you are a US investor weighing whether to buy the dip or move on, the next few quarters of orders and capacity plans could be a key turning point.

You are watching a classic semiconductor cycle play out: expectations were priced for perfection, then earnings revisions and cautious guidance hammered the share price. The critical question now is whether ON is simply a cyclical victim of weaker auto and industrial demand, or whether there is a deeper structural problem in its power and sensing franchises.

Analysis: Behind the Price Action

ON Semiconductor, listed in the US and a key member of the Nasdaq chip complex, has been tightly coupled with broader US semiconductor sentiment. While mega-cap AI names like NVIDIA and the largest foundries have surged, many second-tier analog and power names, including ON, have traded sideways to lower as investors rotate into pure AI compute plays.

Recent news and corporate commentary across US financial media have highlighted three pressure points for ON:

• EV and industrial digestion - customer inventories in electric vehicles, solar and factory automation remain elevated after a two-year boom, leading to cautious order patterns.
• Smartphone and consumer softness - weaker handset and PC demand limits upside from ON's legacy businesses.
• Silicon carbide timing risk - ON has invested aggressively in silicon carbide (SiC) capacity for EV inverters and charging, but the revenue ramp has been slower and lumpier than the market hoped.

At the same time, the strategic story that drew US institutions into ON in the first place has not disappeared. The company is repositioning its portfolio toward structurally higher-margin segments aligned with long-duration US trends:

• Vehicle electrification and advanced driver assistance systems (ADAS).
• High-efficiency power management for AI data centers and cloud infrastructure.
• Industrial automation and energy infrastructure modernization in North America.

US investors are now trying to balance short-term cycle risk against those longer-term themes. The latest 10-Q and management commentary have emphasized tighter capital discipline, focusing capex on internally sourced SiC and higher-return projects, which could support free cash flow once the current downturn bottoms.

Below is a simplified snapshot of how ON Semiconductor currently sits in the US market context, based on recent public filings and cross-checked headlines from major outlets such as Reuters, MarketWatch and Yahoo Finance. Exact figures move daily with the market, but the strategic positioning is stable.

Metric	Context for US investors
Primary listing	ON trades on the Nasdaq in US dollars and is widely held in US semiconductor and mid-cap growth ETFs.
Business mix	Heavy exposure to automotive, industrial and cloud infrastructure power management, with shrinking exposure to low-margin commodity components.
Cycle exposure	Highly sensitive to capex cycles in EVs, factory automation and data centers - sectors that are important in the broader US growth story.
Balance sheet	Management has publicly prioritized maintaining a solid balance sheet and investment-grade style profile, which helps cushion volatility for US equity holders.
Capital returns	Historically skewed toward buybacks over dividends, appealing primarily to US growth and GARP investors rather than income-focused portfolios.

For US investors comparing ON to other chip names, the company's key differentiator remains its vertical integration in SiC and strong auto relationships. If EV demand reaccelerates, ON could enjoy operating leverage that is not fully reflected in current sentiment. On the flip side, if automakers permanently slow or diversify suppliers, ON's returns on the heavy SiC investments could fall short of earlier bullish expectations, justifying a lower valuation multiple.

This is why the stock often trades with amplified beta to the broader Philadelphia Semiconductor Index and the Nasdaq. When US technology is in favor, ON can outperform sharply. When investors crowd into AI GPUs and away from cyclical power plays, ON tends to lag.

Given the volatility, it is essential for individual US investors to align any ON position size with their risk tolerance and time horizon. Short-term traders are focusing on quarter-to-quarter book-to-bill ratios, inventory days and management's demand commentary for US and European OEMs, while long-term holders are concentrating on design-win pipelines for EV platforms that will ship for most of the next decade.

What the Pros Say (Price Targets)

Wall Street's view on ON Semiconductor has shifted from broadly bullish to more mixed as the cycle has rolled over. Recent analyst notes from large US and global banks, including firms like JPMorgan, Goldman Sachs, Morgan Stanley and others tracked by major financial portals, show a wide dispersion of opinions.

Across those sources, consensus still frames ON as a solid long-term story tied to EV and power efficiency, but earnings estimates and price targets have been pulled down to reflect the softer near-term backdrop. Some analysts have taken ratings from "Buy" down to more neutral stances, often citing uncertainty around the precise timing of an auto and industrial recovery, while others maintain more constructive views based on the idea that current expectations are already quite conservative.

Aspect	Recent Street Perspective
Rating balance	Mix of Buy and Hold/Neutral ratings among major US and global banks, with relatively few outright Sell ratings reported by data aggregators.
Key bull arguments	Strong strategic position in EV power, structural content gains per vehicle, and leverage to data center efficiency requirements as AI infrastructure expands in the US.
Key bear arguments	Risk of prolonged digestion in EV and industrial channels, execution and capex intensity in silicon carbide, and competition within power semis.
Valuation framing	Street commentary often highlights ON trading at a discount to earlier peak multiples, but with earnings risk still present if the downturn extends.
Signals to watch	Order trends from US and European automakers, utilization of new SiC capacity, and management updates in upcoming earnings calls and SEC filings.

For a US investor, the practical takeaway is straightforward: analysts are no longer pricing ON for a straight-line EV and industrial boom. Instead, models embed a bumpier path, with more modest growth and profitability expectations. If ON executes better than assumed, particularly in next-generation power for AI data centers and North American EV platforms, there is room for both estimate and multiple expansion. If not, consensus could still drift lower, even from already reduced levels.

Because of this, using analyst targets as a hard "fair value" line can be misleading. A more useful approach is to map ON's prospects against the rest of your US equity allocation. If you are already heavily exposed to volatile cyclical tech and autos, adding ON may increase drawdown risk. If you hold mostly large-cap AI beneficiaries and low-beta sectors, a moderate ON position might diversify your semiconductor exposure toward power, sensing and auto content rather than pure compute.

Always remember that brokers' targets and ratings can change quickly after each earnings report. Following the primary source materials - quarterly earnings calls, slide decks and 10-Q/10-K filings - can offer a more durable view of whether the long-term thesis is staying on track despite the noise in near-term numbers.

For now, ON Semiconductor sits at the intersection of powerful US themes: electrification, energy efficiency and AI infrastructure. Whether that translates into long-term outperformance for your portfolio will hinge less on headlines and more on how the company converts its heavy investment cycle into durable cash flow in the quarters and years ahead.