ON
The bulls are back in the room
ON Semiconductor is having one of those classic Wall Street moments where the story changes faster than the stock can catch up. After a solid Q1 beat, Needham and Rosenblatt both came out Tuesday with higher price targets, basically saying: the business is finally waking up after a long nap.
Needham was the loudest optimist. The firm hiked its target to $110 from $72 and kept a Buy rating, pointing to a big acceleration in ON’s “Other” segment — which is analyst-speak for “the part of the business suddenly getting way more interesting.” The big pitch: AI data-center revenue is expected to double year over year to $500 million in calendar 2026.
Why the Street suddenly cares
That AI number is doing a lot of heavy lifting here. Needham says ON is working with all the major power-supply vendors serving the hyperscalers, which is basically a fancy way of saying the company is standing near the biggest fireworks show in tech and hoping to sell the batteries.
A few other bits are keeping the bullish case from floating away:
- its SiC share of new EV models in China reportedly hit 55% in the quarter
- it’s shipping Treo-based Ethernet gear for a leading North American customer’s zonal architecture
- the energy-infrastructure business is getting an “AI halo effect,” which is exactly the kind of phrase that makes bankers sound like they’ve discovered religion
Not everyone is ready to call it a moonshot
Rosenblatt also raised its target, to $85 from $60, but stayed Neutral. Translation: yes, the recovery looks real, but no, they’re not paying 31 times forward earnings for the privilege of being early.
That split is the whole story in a nutshell. ON is looking better, demand is improving, and the AI angle is finally more than just vibes. But the stock’s already up near its 52-week high, so the easy money may be gone.
Big picture: ON Semiconductor is turning from “cycle left for dead” into “maybe there’s an AI chapter here after all.” Investors just have to decide whether that’s a rerating story, or a story with a little too much caffeine in it.