Abstract
ON Semiconductor will report quarterly results on November 2, 2026 Post-Mkt, with investor focus on whether revenue growth near the midpoint of guidance and gross margin progress toward the 40%–42% range can support a continued rebound in adjusted EPS and profitability.Market Forecast
Based on the latest consensus extracted from the company’s prior guidance and current-quarter forecast, ON Semiconductor’s revenue is estimated at 1.70 billion US dollars, up 12.40% year over year, with adjusted EPS around 0.88, up 48.53% year over year, and EBIT estimated at 0.39 billion US dollars, up 40.37% year over year; management previously guided revenue to 1.65–1.75 billion US dollars and non-GAAP gross margin to 40%–42%. The company has not provided a net profit or net margin outlook for the quarter, but the guidance-implied mix and utilization suggest margin improvement versus the prior quarter’s 39.27% gross margin baseline. The core commercial momentum centers on the power-led franchise as new design-ins ramp and fab utilization rises; management flagged higher contribution from AI data center power platforms along with continued pricing actions that support the gross margin corridor. The most promising growth vector is within the Power Solutions Group’s EliteSiC and AI data center power designs: the segment delivered 0.83 billion US dollars last quarter, and management communications point to approximately 60% year-over-year growth for SiC revenue in 2026 and about 126% year-over-year growth for AI data center revenue in 2026.Last Quarter Review
ON Semiconductor delivered revenue of 1.60 billion US dollars, a 9.18% year-over-year increase, with a gross profit margin of 39.27%; GAAP net profit attributable to the parent company was 227.00 million US dollars, implying a 14.14% net profit margin, and adjusted EPS reached 0.74, up 39.62% year over year. A key financial highlight was the sharp rebound in profitability, with net profit up 779.04% quarter over quarter, supported by stronger utilization and a better-than-expected adj. EPS outcome versus prior estimates. The main business portfolio posted stable contributions: Power Solutions Group revenue was 0.83 billion US dollars, Analog and Mixed-Signal Group revenue was 0.55 billion US dollars, and Intelligent Sensing Group revenue was 0.23 billion US dollars, while total company revenue rose 9.18% year over year driven by a ramp in AI data center-related demand and improving factory throughput.Current Quarter Outlook
Core Revenue Engine: Power Solutions Group
The Power Solutions Group (PSG) remains the primary revenue engine this quarter, anchored by continued momentum in high-voltage power management and the ramp of AI data center power systems. Management signaled a utilization uplift and selective pricing actions since the prior quarter, which are consistent with the guided non-GAAP gross margin corridor of 40%–42%. PSG’s mix benefits from higher-value content in AI-related platforms, which can carry better margin characteristics than legacy automotive and industrial programs. The core question for this quarter is whether PSG shipment momentum and mix can offset any softness in legacy verticals and carry gross margin from 39.27% toward the guided band. From a P&L standpoint, the current-quarter EBIT estimate of 0.39 billion US dollars implies operating leverage if revenue tracks around the mid-point of the 1.65–1.75 billion US dollars range. Execution on factory loading is critical, as management has previously discussed the sensitivity of gross margin to utilization swings; a few points of utilization improvement can translate into notable basis-point expansion over subsequent quarters. On balance, the runway for PSG this quarter is favorable, provided the ramp of AI power programs and disciplined cost controls maintain their current trajectory.Most Promising Growth Vector: AI Data Center Power and EliteSiC
Within PSG, AI data center power and EliteSiC are positioned as the largest incremental growth drivers in 2026 and the current quarter’s setup. Management communications indicate that AI data center revenue for 2026 is expected to more than double, with external estimates around 126% year-over-year growth, and SiC revenue growth guided at approximately 60% year over year. The company’s disclosed design wins in data center infrastructure, including battery backup units and power supply units for hyperscalers, are expanding shipment breadth and depth, which supports a higher-quality revenue mix. This mix shift is material for earnings, as AI power content tends to carry premium performance requirements and potentially better pricing, supporting non-GAAP gross margin uplift toward the 40%–42% corridor this quarter. The integration of advanced power topologies with EliteSiC components also augments performance in 800V-class designs, which are attractive in both AI infrastructure and select transportation platforms. Market feedback points to robust order momentum for AI-related deployments, and management’s guidance implies sequential uplift in the “other” end-market revenue streams, consistent with data center exposure. The key watch item for this quarter is the transition from early ramp to sustained volume, where supply chain execution and customer qualification cycles dictate the cadence; early signals suggest that volumes are lining up with the guided revenue range.What Will Most Influence the Stock This Quarter
Investors are likely to focus on whether revenue lands near the midpoint of 1.65–1.75 billion US dollars and whether non-GAAP gross margin prints within the 40%–42% range. Delivery in line with that corridor, combined with adjusted EPS near 0.88, would reinforce the EBIT trajectory implied by the 0.39 billion US dollars estimate and help validate the operating leverage narrative. Any updates on the cadence of AI data center power shipments will be pivotal, as the year-on-year growth expectations for this line underpin the broader top-line and margin recovery path. Commentary on fab loading and the lagged impact of utilization improvements will also matter; management has previously communicated that every point of utilization improvement can contribute notable basis-point gains in gross margin over subsequent quarters. Investors will listen for pricing discipline relative to the mix shift and for indications of inventory normalization on customer premises, given the company’s emphasis on maintaining healthy channel levels. Lastly, any incremental color on ongoing portfolio moves and program discipline will inform how ON Semiconductor sustains medium-term margin expansion beyond the near-term corridor.Analyst Opinions
Among recently published views, the ratio of bullish to bearish opinions skews decisively positive, with a majority of Buy or Overweight ratings and no explicit Sell calls in the collected set. Notable institutions have reiterated constructive stances: Evercore ISI maintained a Buy with a 137.00 US dollars target, highlighting earnings power improvement tied to gross margin progress and AI power ramps; Wells Fargo reiterated a Buy at 100.00 US dollars, citing confidence that revenue will track within the guided range and that margins will sequentially expand. Susquehanna adjusted its target to 120.00 US dollars from 150.00 US dollars but stayed positive, pointing to a more measured near-term setup while remaining constructive on AI power contributions and utilization-driven margin uplift. Needham reaffirmed Buy with a 116.00 US dollars target, emphasizing the durability of gross margin improvements as utilization increases and as AI data center power grows as a percent of sales. B. Riley also kept Buy while cutting its target to 105.00 US dollars, viewing the quarter’s alignment with guidance and AI power momentum as more important than short-term target recalibrations.The prevailing positive camp focuses on three pillars for this quarter: revenue delivery in the 1.65–1.75 billion US dollars band, confirmation of non-GAAP gross margin in the 40%–42% range, and visibility into AI data center power growth that aligns with the 2026 doubling narrative. Analysts broadly argue that if ON Semiconductor meets or modestly exceeds the midpoint on revenue and EPS around 0.88, the setup for 2027 margin expansion remains intact given the mix toward AI infrastructure and EliteSiC. They also highlight that the last quarter’s 39.27% gross margin and 14.14% net margin establish a credible floor, while guidance implies step-ups from utilization, pricing, and cost discipline. Several notes underscore that last quarter’s adjusted EPS beat versus internal models offers a supportive baseline for the upcoming print. Overall, the majority view judges the quarter as a validation checkpoint for the margin corridor and AI power growth thesis, expecting revenue growth of 12.40% year over year and a substantial uplift in adjusted EPS of 48.53% year over year to provide the core evidence investors seek this earnings cycle.
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