ON Semiconductor Corporation

NASDAQ Global Select
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Bullish +65

10 Best Semiconductor Stocks to Buy Heading into 2026

📊 Global semiconductor sales reached $208.4 billion in Q3 2025, representing a 15.8% quarter-over-quarter increase and 25.1% year-over-year growth.

🚀 NVIDIA (NVDA) is projected to sell 6.9 million units of its Blackwell chips in calendar year 2026, reinforcing its leadership in AI computing.

📈 Advanced Micro Devices (AMD) achieved a milestone with the ZAYA1 model, demonstrating competitive performance in large-scale AI training on its Instinct GPUs.

🔥 Astera Labs (ALAB) reported a massive 104% year-over-year revenue surge in Q3 2025, driven by increased unit shipments and higher average selling prices for AI infrastructure products.

⚠️ ON Semiconductor (ON) announced pre-tax non-cash impairment charges between $200 million and $300 million related to its Silicon Carbide manufacturing assets.

📉 STMicroelectronics (STM) saw net revenues fall 2.0% year-over-year in Q3 2025, with operating income dropping significantly due to restructuring and impairment costs.

💰 CEVA (CEVA) initiated an underwritten public offering of 3 million shares to finance potential acquisitions or investments in complementary technologies.

🛠️ Power Integrations (POWI) appointed Nancy Erba as CFO, a move analysts view positively given her two decades of financial leadership experience.

⏱️ SiTime (SITM) expects rapid growth to continue with revenue surpassing 50% year-over-year for 2025, fueled by AI demand for precision timing solutions.

🧠 Arm Holdings (ARM) reported record royalty revenue of $620 million in Q2 2026, with a price target lifted to $180 by Loop Capital.

📉 Qnity Electronics (Q) saw its stock decline over 16% recently due to uncertainty in the semiconductor growth outlook and AI bubble concerns, despite delivering six consecutive quarters of organic growth.

🔋 STMicroelectronics signed a 15-year Power Purchase Agreement with TSE for renewable solar power starting in 2027.

Bullish Signals
  • NVIDIA is uniquely positioned at the center of the AI industrial revolution with hundreds of millions of GPUs installed and deep integration in enterprise initiatives.
  • AMD's Instinct MI350 Series GPUs are ramping faster than any product in its history, with expectations for over 60% revenue CAGR in the data center business.
  • Astera Labs achieved a turnaround from an operating loss to $55.4 million in operating income in Q3 2025 due to strong demand for signal conditioning and smart cable modules.
  • Arm Holdings exceeded its guidance range with non-GAAP EPS of $0.39, driven by increased revenue and lower OpEx.
  • SiTime's Communications-Enterprise-Datacenter business is expected to drive rapid growth, surpassing 50% YoY for the full year 2025.
  • CEVA surpassed expectations on both revenue and non-GAAP diluted income per share due to robust licensing execution and strong royalty growth.
  • Power Integrations remains well-placed for strong growth in high-voltage DC transmission, grid modernization, and electric transportation sectors.
Risk Factors
  • ON Semiconductor faces a significant headwind from $200 million to $300 million in pre-tax non-cash impairment and accelerated depreciation charges related to Silicon Carbide manufacturing assets.
  • STMicroelectronics reported a 2.0% year-over-year decline in net revenues and a substantial drop in operating income due to asset impairments and restructuring charges.
  • Qnity Electronics experienced a stock decline of over 16% recently, driven by uncertainty regarding the semiconductor growth outlook and concerns about an AI bubble.
  • Power Integrations reported a loss from operations of $3.95 million in Q3 2025 compared to income in the prior year period amidst higher operating expenses.
Full Analysis
This article presents a curated list of the '10 Best Semiconductor Stocks to Buy Heading into 2026,' based on a screening methodology that prioritizes hedge fund holdings and analyst upside potential. The global semiconductor market is highlighted as growing, with Q3 2025 sales reaching $208.4 billion globally, driven by demand for memory and logic chips, particularly in the Asia Pacific and Americas regions. The report details specific financial performance and recent developments for ten companies, including NVIDIA (NVDA), Advanced Micro Devices (AMD), Astera Labs (ALAB), ON Semiconductor (ON), STMicroelectronics (STM), Power Integrations (POWI), SiTime (SITM), Arm Holdings (ARM), CEVA (CEVA), and Qnity Electronics (Q). The analysis covers revenue growth, earnings beats, analyst price target changes, and strategic initiatives like new product launches or public offerings. Key highlights include NVIDIA's strong position in AI computing with projected peak Blackwell chip sales of 6.9 million units in 2026, AMD's successful training of a large-scale AI model using its Instinct GPUs, and Astera Labs' explosive 104% year-over-year revenue growth driven by hyperscaler demand. Conversely, ON Semiconductor faces headwinds from $200-$300 million in asset impairments related to Silicon Carbide manufacturing, while STMicroelectronics reported a decline in net revenues and operating income due to restructuring charges. The article concludes with a promotional pitch for the publisher's newsletter, suggesting that imitating top hedge fund picks can outperform the market. It emphasizes that while some AI stocks like NVIDIA are reasonably valued, others may offer higher returns with limited downside risk, though it does not provide specific buy/sell recommendations for all ten tickers beyond general bullish sentiment.