ON Semiconductor posted Q1 2026 results on May 4 that beat Wall Street expectations on both the top and bottom lines. Revenue came in at $1.51 billion, up 4.7% year-over-year, while non-GAAP EPS of $0.64 topped the $0.61 consensus estimate.
ON Semiconductor Corporation, ON
The stock opened at $103.19 on Friday, near its 52-week high of $105.90, after rallying close to 90% year-to-date. That kind of run gets people’s attention — and raises questions about how much good news is already in the price.
The quarter’s standout story was AI data center revenue, which jumped 30% sequentially. Management expects that segment to double over the full year 2026. ON’s power modules and point-of-load solutions are being designed into liquid-cooled, high-density server racks supporting next-generation Nvidia GPUs.
The revenue opportunity per rack is projected to grow from $15,000 today to $115,000 by 2030, according to management. That’s a number worth noting.
ON’s Power Solutions Group segment grew 14% year-over-year in Q1, driven largely by AI-related demand. The company’s silicon carbide platform also showed strength, with CEO Hassane El-Khoury noting that Onsemi’s SiC solutions were designed into roughly 55% of new EV models debuted at Auto China in May.
The “Fab Right” manufacturing strategy — consolidating production into more efficient 300mm facilities — is nearing completion. Management says the transition is reducing capital expenditure and improving free cash flow margins, which hit a record 24% in 2025. ON is now tracking toward a free cash flow run rate above $2 billion annually.
The company is running an aggressive $6 billion buyback program and directing 100% of free cash flow toward repurchases. With a net debt-to-EBITDA ratio below 1x, the balance sheet is in solid shape.
Not everything is firing at full speed. The Analog & Mixed-Signal segment fell 5% year-over-year in Q1, accounting for about 36% of total revenue. Automotive and industrial markets only recently returned to modest growth after seven consecutive quarters of declines — managment describes the trend as stabilization, not a full recovery.
ON trades at roughly 35x forward non-GAAP earnings, slightly below Texas Instruments at 36.3x. But that’s a steep climb from ON’s five-year average forward P/E of 18x.
GAAP numbers tell a harder story. Heavy restructuring charges of $329.3 million pushed ON to a GAAP net loss of $33.4 million, or -$0.08 per share, in Q1. GAAP operating margin came in at just 3.5%.
Institutional ownership stands at 97.7%, while insiders hold just 0.35% of the stock. CFO Trent Thad sold 60,000 units in February at $71.22, and other insiders have sold a combined $11.3 million worth over the past three months.
Analyst sentiment is split — 14 Buys, 15 Holds, and one Sell, with an average price target of $87.27, roughly 15% below the current price.
For Q2 2026, management guided EPS of $0.65 to $0.77. Full-year EPS consensus sits at $3.09.
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