Get ready for a thrilling ride as we dive into the world of AI stocks and uncover a potential hidden gem!
The Next AI Superstar?
While everyone's talking about Nvidia's impressive growth, there's another AI stock that could steal the show in 2026. Enter ON Semiconductor (ON), a company with a unique twist on AI technology.
But here's where it gets controversial...
One Wall Street analyst, Mark Lipacis from Evercore ISI, predicts a massive 47% surge for ON Semiconductor's stock price by 2026. This is a bold call, especially considering ON's performance in 2025, which saw its stock price drop by a double-digit percentage.
The Power of Intelligent Technology
ON Semiconductor focuses on developing intelligent power and sensing technology, which is used in a wide range of applications, from data centers to electric vehicles (EVs) and industrial facilities. The company estimates its total addressable market to be a whopping $44 billion, with an expected growth rate of around 18% annually.
ON's recent launch of its vertical gallium nitride (vGaN) power semiconductors is a game-changer. These chips offer higher operating voltages and faster switching, reducing energy loss by up to 50%. This innovation is a huge advantage, especially for AI data centers, which require efficient power management.
Additionally, ON's acquisition of Aura Semiconductor's Vcore power technologies is expected to boost growth in 2026. ON's CEO, Hassane El-Khoury, believes Vcore will help them offer more comprehensive solutions for next-generation AI data centers.
The Reality Check
However, not everyone on Wall Street shares Lipacis's optimism. The average price target for ON Semiconductor reflects a more modest potential upside of just 9%. Furthermore, only half of the analysts surveyed recommended buying the stock, with some even advising investors to sell.
ON Semiconductor's Q3 results also raise concerns. Revenue fell by 12% year-over-year, and diluted earnings per share took a 32% hit. Management's revenue growth expectations of 10-12% CAGR by 2027, while impressive, pale in comparison to Nvidia's projected 48% revenue increase next year.
And this is the part most people miss...
The fastest-growing segments of ON's addressable market are EVs and charging stations. But according to BloombergNEF, U.S. EV adoption is slowing due to various factors, including policy changes. This could impact ON's growth prospects.
The Verdict
While ON Semiconductor's technology and growth opportunities are exciting, the reality is that the company has some catching up to do. The consensus Wall Street view of a modest gain for ON in 2026 seems more realistic than the 47% surge predicted by Evercore ISI.
But what about Nvidia's projected 44% surge? Could that also be overly optimistic?
What do you think? Is ON Semiconductor a hidden gem waiting to shine, or is this analyst's prediction too bullish? Share your thoughts in the comments below!
