#5 - Onsemi (NASDAQ:ON)
Onsemi (NASDAQ: ON), formerly ON Semiconductor Corporation, is one of the worst-performing chip stocks at this point in the cycle. The stock is down 15% in the last 12 months and over 8% in 2024. The bearish short-term results and the bullish long-term outlook for ON stock comes down to its positioning.
While the company isn’t absent from the data center market, the bulk of its solutions are in the renewable energy sector and electric vehicles (EVs). These stocks have struggled as inflation impacts demand, and higher interest rates create a more challenging environment for companies that need access to capital. Onsemi also has exposure to other sectors including aerospace and medical technology (medtech).
However, the headwinds could quickly turn to tailwinds when the Federal Reserve begins to lower interest rates. That may not happen until November 2024 or even 2025. In the meantime, investors can pick up shares while the stock trades at an attractive 20x forward P/E.
About Onsemi
onsemi is engaged in disruptive innovations and also a supplier of power and analog semiconductors. The firm offers vehicle electrification and safety, sustainable energy grids, industrial automation, and 5G and cloud infrastructure, with a focus on automotive and industrial end-markets. It operates through the following segments: Power Solutions Group, Advanced Solutions Group, and Intelligent Sensing Group.
Read More - Current Price
- $70.35
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 16 Buy Ratings, 5 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $85.87 (22.1% Upside)
