ON Stock Draws Bullish Initiation From StoneX — Analyst Sees Nearly 50% Upside On Broadening Chip Recovery

• StoneX sees Onsemi as one of the best ways to benefit from a broadening chip cycle.
• The firm pointed to rising semiconductor content in vehicles as a key driver for Onsemi's automotive business.
• The chipmaker targets 12% to 14% annual revenue growth through 2030, following a 9% increase in fiscal second-quarter sales.

Onsemi (ON) received a bullish initiation from StoneX on Thursday, with analyst Gary Mobley assigning a ‘Buy’ rating and identifying the chipmaker as one of the best ways to play the “broadening chip cycle strength.”

According to TheFly, Mobley set a $110 price target on ON stock, implying nearly 50% upside from Wednesday's closing price of $73.36. 

The firm believes Onsemi's growth prospects extend beyond artificial intelligence (AI) data centers, with its automotive business offering another avenue for expansion.

Why StoneX Sees Growth Beyond AI

The brokerage pointed to rising semiconductor content in vehicles as a key driver for Onsemi's automotive business, per TheFly. It also highlighted the company's presence across the AI data center power infrastructure, where its technologies help manage and convert electricity.

At its investor day last month, Onsemi laid out an ambitious growth roadmap, projecting that AI data center revenue would more than double in both 2026 and 2027 before exceeding $2.5 billion annually by 2030.

The company also targeted compound annual revenue growth (CAGR) of 12% to 14% between 2026 and 2030, supported by opportunities across automotive, industrial and AI data center markets.

Onsemi's automotive strategy focuses on increasing chip content per vehicle as automakers adopt electrification, advanced driver-assistance systems and software-defined architectures.

Recent Developments And Earnings Outlook

Onsemi has also been expanding its presence in energy infrastructure. On Wednesday, the company announced that renewable energy technology firm Sungrow had adopted its silicon carbide hybrid power modules for the PowerTitan 3.0 energy storage platform.

Earlier this month, Onsemi revised its agreement to acquire Synaptics (SYNA), replacing an approximately $7 billion all-stock transaction with a $5.7 billion cash deal. The acquisition is intended to expand Onsemi's capabilities in connected computing.

Onsemi's fiscal second-quarter (Q2) revenue rose 9% year over year to $1.60 billion. AI data centers remained the company's fastest-growing business, supported by growing demand for its high-voltage power solutions, CEO Hassane El-Khoury said.

For the third quarter (Q3), Onsemi has guided for revenue of $1.65 billion to $1.75 billion, compared with $1.60 billion in the preceding quarter.

What Retail Thinks About ON Stock

On Stocktwits, retail investors’ sentiment surrounding ON stock remained in the ‘extremely bearish’ zone. The sentiment has flipped from ‘bullish’ a month ago.

So far this year, ON shares have rallied over 29%. By comparison, the iShares Semiconductor ETF (SOXX), which holds the stock, has risen more than 65% during this period.

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