• Earlier this week, onsemi reported that automotive demand appears to have bottomed, with improved book-to-bill ratios and longer customer visibility, and raised its 2026 AI data-center revenue outlook to more than double year over year.
• The update underscores how onsemi’s power and silicon carbide portfolio is increasingly tied to two structurally important end-markets: vehicle electrification and AI data centers.
• Next, we’ll examine how this firmer automotive demand backdrop and upgraded AI data-center outlook affect onsemi’s broader investment narrative.

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ON Semiconductor Investment Narrative Recap

To own onsemi, you need to believe its power and silicon carbide portfolio can compound value as EV and AI data-center content grows. This week’s comments that automotive demand has likely bottomed and that 2026 AI data-center revenue is expected to more than double year over year support the near term catalyst of a cyclical margin recovery, but they also sharpen the key risk: competition and capacity bottlenecks if auto and AI power demand accelerate at the same time.

Against this backdrop, the expanded collaborations with NIO and Geely around 900V and SEA-S EV platforms feel especially relevant. These deals tie onsemi’s EliteSiC devices directly into higher-voltage, higher-content vehicles, reinforcing the longer term thesis around EV share gains while also intensifying the shorter term execution risk if EV ramps outside China remain sluggish or pricing pressure in SiC worsens.

Yet beneath the upbeat AI and EV narrative, investors should be aware that...

ON Semiconductor's narrative projects $8.4 billion revenue and $2.3 billion earnings by 2029. This requires 11.4% yearly revenue growth and an earnings increase of about $1.7 billion from $573.7 million today.

Uncover how ON Semiconductor's forecasts yield a $113.52 fair value, a 52% upside to its current price.

Exploring Other Perspectives

The most cautious analysts were already assuming about US$8.0 billion of revenue and US$2.2 billion of earnings by 2029, yet still saw overcapacity, rising costs and competitive pressure as serious headwinds, which shows how differently you and they might interpret fresh signals on AI data centers and automotive demand.

Explore 4 other fair value estimates on ON Semiconductor - why the stock might be worth just $75.99!

Decide For Yourself

Don't just follow the ticker - dig into the data and build a conviction that's truly your own.

• A great starting point for your ON Semiconductor research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free ON Semiconductor research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate ON Semiconductor's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.