ON Semiconductor Corporation

NASDAQ Global Select
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Somewhat Bearish -25

10 Best Semiconductor Stocks to Buy Heading into 2026

AI-generated analysis

📉 ON Semiconductor reported Q3 2025 revenue of $1.5 billion, reflecting a 12% year-over-year decline with specific weakness in its PSG segment down ~11%.

⚠️ The company approved pre-tax non-cash impairment and accelerated depreciation charges between $200 million and $300 million related to manufacturing assets, particularly Silicon Carbide facilities.

📈 Diluted EPS reached $0.63 in Q3 2025, showing stabilization in core markets and positive growth in AI despite the revenue contraction.

🏦 Morgan Stanley analyst Joseph Moore lifted the price target on ON Semiconductor to $56 from $55 while maintaining an 'Equal Weight' rating.

💡 The stock is ranked fourth among ten best semiconductor stocks for 2026, selected based on hedge fund popularity and analyst upside potential.

🔋 ON Semiconductor provides intelligent sensing and power solutions to the market.

Bullish Signals
  • Diluted EPS stood at $0.63 in Q3 2025 compared to $0.41 in the prior quarter, indicating continued signs of stabilization throughout core markets.
  • The company is included in a top-ten list of semiconductor stocks for 2026 selected by hedge funds and analysts for at least 20% upside potential.
Risk Factors
  • Management approved pre-tax non-cash impairment and accelerated depreciation charges between $200 million and $300 million related to long-lived manufacturing assets.
  • Revenue declined 12% year-over-year to $1.5 billion in the quarter ended October 3, 2025, driven by an ~11% drop in PSG segment revenue.
  • The impairment charges are specifically linked to investments in Silicon Carbide manufacturing assets, indicating potential overcapacity or technology transition issues.
Full Analysis
The article identifies ON Semiconductor Corporation (NASDAQ: ON) as the fourth-ranked semiconductor stock for investment heading into 2026, citing analyst coverage and recent financial developments. Morgan Stanley analyst Joseph Moore recently lifted the price target on ON's stock to $56 from $55 while maintaining an 'Equal Weight' rating, noting that the company is stabilizing in its core markets. However, the report highlights significant headwinds for ON Semiconductor, specifically regarding a recent 8-K filing where management approved pre-tax non-cash impairment and accelerated depreciation charges between $200 million and $300 million. These charges relate to long-lived assets associated with manufacturing facilities, particularly investments in Silicon Carbide manufacturing assets. Financially, the company reported revenue of $1.5 billion for the quarter ended October 3, 2025, representing a 12% year-over-year decline compared to the prior year period. Revenue from its PSG segment specifically fell approximately 11% year-over-year. Despite these declines and impairment charges, diluted EPS stood at $0.63 in Q3 2025, showing improvement over the previous quarter. The article concludes that ON Semiconductor offers intelligent sensing and power solutions. While the analyst views the incremental impairments as likely related to specific manufacturing assets, the company is included in the top ten list due to its position in the broader semiconductor space and potential for future upside.