ON Semiconductor Corporation

NASDAQ Global Select
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Slightly Bullish +25

Rising Power Demand Fuels ON Semiconductor’s (ON) Upside

📈 Heartland Mid Cap Value Fund returned 9.90% in Q2 2026, underperforming the Russell Midcap Value Index's 13.40% return.

🚗 ON Semiconductor is a leader in silicon carbide semiconductors used primarily in electric vehicles and renewable energy inverters.

💰 The company endured a cyclical deceleration since 2023 but optimized its manufacturing footprint and launched high-margin product platforms.

📉 ON Semiconductor shares gained 57.48% over the past 52 weeks, closing at $93.73 per share on July 14, 2026.

🤖 Rising power voltage requirements in AI datacenters are driving adoption for ON's next-generation power management solutions.

⚠️ Investors relying on rapid datacenter growth should note that this segment will remain a smaller percentage of total sales compared to automotive and industrial markets.

📉 Heartland Advisors reduced its weighting in ON after the stock more than doubled by early June, reaching their price target.

📊 Hedge fund sentiment is cooling slightly, with 58 portfolios holding ON at the end of Q1 2026 compared to 63 previously.

🔍 The fund believes other AI stocks hold greater promise for delivering higher returns within a shorter time frame than ON.

📈 Despite the reduction, Heartland Advisors intends to maintain a reasonably sized position in ON Semiconductor.

Bullish Signals
  • ON Semiconductor is a leader in silicon carbide semiconductors, which are critical for electric vehicles and renewable energy inverters to reduce energy loss.
  • The company successfully implemented a robust self-help playbook during the downturn, optimizing its manufacturing footprint and launching new high-margin product platforms.
  • ON has gained market share with leading global EV manufacturers and enjoys outsized representation in newer car models.
  • Rising power voltage requirements in AI datacenters are driving adoption for ON's next-generation power management solutions.
  • The stock reached the fund's price target of $93.73 per share after more than doubling in price by early June, indicating strong market capitalization growth.
Risk Factors
  • Heartland Advisors reduced its weighting in ON Semiconductor after the stock price more than doubled by early June, reaching their established price target.
  • The fund underperformed the Russell Midcap Value Index in Q2 2026 due to negative stock selection despite technology being a top return contributor.
  • Hedge fund portfolios holding ON decreased from 63 in the previous quarter to 58 at the end of the first quarter of 2026.
  • The fund explicitly states that other AI stocks hold greater promise for delivering higher returns over a shorter time frame compared to ON.
  • Even in optimistic scenarios, datacenter-related revenue will be a materially smaller percentage of total sales compared to core automotive and industrial end markets.
Full Analysis
Heartland Advisors released its second-quarter 2026 investor letter for the Heartland Mid Cap Value Fund, which returned 9.90% compared to the Russell Midcap Value Index's 13.40%. The fund highlighted ON Semiconductor Corporation (NASDAQ:ON) as a key holding within its Deep Value bucket, noting that while the stock underperformed the index due to negative security selection in the tech sector, it remains a significant position. The article details ON Semiconductor's business focus on power management and image sensing for automotive, industrial, aerospace, and medical markets. The company is a leader in silicon carbide semiconductors used in electric vehicles and renewable energy. Despite a cyclical downturn starting in 2023, management optimized its footprint and launched high-margin product platforms. Recently, the firm gained market share with leading global EV manufacturers and sees rising demand for next-generation power solutions in AI datacenters. Heartland Advisors reduced its weighting in ON after the stock price more than doubled by early June, reaching their price target of $93.73 per share as of July 14, 2026. The firm acknowledges that while multiple drivers have converged to create potential intrinsic value, they believe other AI stocks may offer higher returns over a shorter timeframe. Consequently, ON is not included in the fund's list of 40 most popular stocks heading into 2026, though the fund intends to maintain a reasonably sized position. The report notes that investors should be aware that even in optimistic scenarios, datacenter-related revenue will remain a materially smaller percentage of total sales compared to core automotive and industrial end markets. Hedge fund sentiment is mixed, with 58 portfolios holding ON at the end of Q1 2026, down from 63 in the previous quarter. The article concludes by directing readers to other reports on AI stocks and best-performing sectors.