ON Should I Buy
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ON Semiconductor Corp is not a good buy for a beginner, long-term investor at this moment. The stock is currently in a downtrend with weak financial performance, insider selling, and no strong positive catalysts to support a recovery. While long-term prospects in AI and industrial markets exist, they are unlikely to materialize in the near future, making this stock unsuitable for immediate investment.
The stock is in a bearish trend with a negatively expanding MACD (-1.293), indicating downward momentum. RSI at 15.107 shows the stock is oversold, but this does not guarantee a reversal. The pre-market price is $59.49, down -2.24%, and is approaching the S2 support level of $58.372. Moving averages are converging, signaling indecision.
Analysts see potential long-term growth in AI data centers, Treo platform, and VGaN technologies. Signs of improvement in auto and industrial markets were noted, though still lagging.
Insiders are selling heavily, with a 306.82% increase in selling activity. Financial performance in Q4 2025 showed significant declines in revenue (-11.17% YoY), net income (-52.15% YoY), EPS (-48.86% YoY), and gross margin (-20.58% YoY). Semiconductor sector volatility due to Nvidia's earnings and macroeconomic factors like rising oil prices and bond yields. Analysts have mixed ratings, with some downgrades and limited near-term upside.
In Q4 2025, revenue dropped to $1.53 billion (-11.17% YoY), net income fell to $181.8 million (-52.15% YoY), EPS declined to $0.45 (-48.86% YoY), and gross margin decreased to 35.3% (-20.58% YoY). These figures indicate significant challenges in profitability and growth.
Analysts are mixed on ON Semiconductor. Barclays initiated coverage with an Equal Weight rating and a $75 price target, citing challenges like high China and auto exposure. Benchmark downgraded the stock to Hold due to limited near-term upside and margin pressures. Some analysts raised price targets (e.g., Needham to $72, Deutsche Bank to $75), but most remain cautious about immediate growth prospects.
