ON Semiconductor (ON) has just been added to several Russell growth indices, including the Russell 3000 Growth and Russell 1000 Growth Benchmarks, bringing renewed attention to how the stock fits into growth-focused portfolios.

Despite its recent index additions and an M&A call with Synaptics, ON Semiconductor’s share price has been volatile, with a 7 day share price return down 18.24% and a 30 day share price return down 21.74%, set against a 90 day share price return of 52.16% and a 1 year total shareholder return of 69.13%. This suggests that longer term momentum has held up better than the latest pullback.

If ON Semiconductor’s index inclusion has you thinking more broadly about growth themes, it could be a good time to see what else is moving with 53 AI infrastructure stocks

With ON Semiconductor now sitting in several growth indices, a 1-year total shareholder return of 69.13% and a recent pullback after strong 90-day gains, the key question is simple: is there still value on the table or are markets already pricing in the next leg of growth?

Most Popular Narrative: 9% Undervalued

ON Semiconductor’s most followed narrative points to a fair value of $103.97, compared with the last close at $94.63, framing the recent pullback in a different light.

The company's strategic investments in silicon carbide (SiC), wide bandgap technologies, and advanced power management solutions for both automotive and AI data centers position it at the forefront of key structural growth markets. As these high-value products ramp, they are expected to enhance margins and drive long-term earnings growth.

Curious what sits behind that margin story and valuation gap? The core narrative leans on a mix of faster earnings growth, richer profitability and a future earnings multiple that is very different from where ON Semiconductor trades today.

Result: Fair Value of $103.97 (UNDERVALUED)

However, ON Semiconductor’s significant exposure to the electric vehicle market and ongoing manufacturing underutilization could pressure margins if demand softens or if capacity remains below efficient levels.

Another View: ON Semiconductor Through a Cash Flow Lens

The most popular ON Semiconductor narrative leans on earnings and multiples, but the SWS DCF model points in a different direction. At $94.63, ON is trading above an estimated future cash flow value of $74.77, which frames the stock as expensive rather than undervalued and raises a simple question for investors: which story feels more convincing to you?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out ON Semiconductor for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 41 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Mixed signals around ON Semiconductor’s valuation and business drivers can be confusing. Take time to review the facts for yourself and weigh both the potential upside and downside with 2 key rewards and 3 important warning signs

Looking for more investment ideas beyond ON Semiconductor?

If ON Semiconductor has sharpened your focus on growth, do not stop here; widen your search now with a few targeted stock ideas that others may be missing.

• Target potential mispricings by scanning companies that combine quality with attractive valuations using the 41 high quality undervalued stocks.
• Strengthen the defensive side of your portfolio by reviewing companies in the 73 resilient stocks with low risk scores that score well on resilience.
• Stay ahead of the crowd by uncovering less-followed opportunities surfaced in the screener containing 19 high quality undiscovered gems.

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.