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ON Semiconductor Corporation (ON), headquartered in Scottsdale, Arizona, is a global semiconductor manufacturing leader specializing in intelligent power and sensing technologies. With a market cap of $30.28 billion, ON Semiconductor plays a pivotal role in the technology sector, offering a diverse range of products that serve industries such as automotive, industrial, and consumer electronics while maintaining a strong commitment to energy efficiency and innovation.
Companies valued at around $10 billion or more are classified as "large-cap stocks," and ON Semiconductor is a prime example of this. Its extensive portfolio of intelligent power and sensing technologies positions it as a major player in the global semiconductor industry, providing essential products that support key sectors such as automotive, industrial, and consumer electronics.
ON shares are trading 26.5% below their 52-week high of $95.69, which they hit on Sep. 20 last year. The stock has declined 2.2% over the past three months, underperforming the broader Nasdaq Composite ($NASX), which has marginally declined over the same time frame.
In the longer term, ON is down 15.8% on a YTD basis, and the shares have declined by 24.4% over the past 52 weeks. In comparison, the Nasdaq has gained 17.2% in 2024 and rallied 28.3% over the past year.
To confirm its bearish trend, ON has been trading below its 200-day and 50-day moving averages since early September.
ON Semiconductor has faced challenges due to its high capital intensity, which has strained free cash flow as it invests heavily in silicon carbide technology and manufacturing. However, its stock surged 11.5% on Jul. 29 following stronger-than-expected Q2 results. The rise was also driven by positive guidance for the third quarter and a major multiyear supply agreement with Volkswagen, positioning ON Semiconductor as a key supplier of silicon carbide power chips for electric vehicles.
Highlighting the contrast in performance, ON's competitor, STMicroelectronics N.V. (STM), has underperformed the stock. STM has declined 43% on a YTD basis.
Analysts are moderately bullish about ON's prospects despite the weak price performance. The stock has a consensus rating of "Moderate Buy" from 28 analysts in coverage. The mean price target of $88.12 reflects a 25.2% premium over current levels.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
