A greener shoot in the semiconductor swamp
onsemi opened 2026 with a pretty clear message: the chip slump might finally be losing steam. The company said Q1 revenue hit $1.513 billion, topping the midpoint of its guidance, while non-GAAP operating margin reached 19.1% — the kind of number that tells you the business is squeezing more profit out of each sales dollar than it was a year ago.
And yes, the reported GAAP numbers still look a little messy. onsemi posted a GAAP diluted loss of $0.08 per share, but non-GAAP diluted EPS came in at $0.64. That gap is the usual “please ignore the accounting fog and look at the underlying machine” moment that earnings season loves to serve up.
The buyback button is getting a workout
The bigger investor clue here might be the capital return. onsemi bought back $346 million of stock during the quarter, which the company said was about 160% of free cash flow. That’s not exactly a company hiding in the corner. It’s more like management walking into the room and saying, “We think our own stock is worth a taste.”
That matters because buybacks can help support per-share earnings, especially when demand is recovering and a cyclical business is trying to re-rate itself from sad-cycle to recovery-story.
Why you should care
onsemi said demand strengthened through the quarter and that it has “moved beyond the cyclical trough on a path to recovery.” For investors, that’s the sentence to circle, underline, and maybe put a little digital sticky note on. If the recovery holds, the combo of better margins, stronger end demand, and aggressive repurchases could give the stock a friendlier runway.
Big picture: this isn’t victory lap territory yet, but it does look a lot less like a semiconductor winter and a lot more like spring trying to show up early.