Jefferies has lifted its price objective for ON Semiconductor to $73.00, up from $65.00, and continues to carry a Buy rating on the shares. The raised target implies approximately a 12% upside relative to the prevailing market price of $65.08, and comes as the stock trades near its 52-week peak of $66.86.
The brokerage highlighted accelerating demand tied to AI data centers as a key supporting factor. That AI data-center exposure represents about 7% of ON Semiconductor’s revenue and, according to Jefferies, helps offset pressure stemming from the company’s exit from noncore businesses and episodic weakness in the industrial end market.
These supportive trends accompany a backdrop in which ON’s revenue has contracted by 16.13% over the past twelve months. Jefferies acknowledged that, while there are some encouraging signs in the automotive segment, the firm does not yet see clear evidence of inventory restocking or a broader upcycle there.
Looking ahead, Jefferies anticipates a bumpy 2026 as ON completes phased exits from multiple business lines. The planned reductions are scheduled across separate quarters - $50 million of business in the March quarter, followed by $100 million in June and another $100 million in September. Despite those planned exits and the resulting near-term volatility, Jefferies retains a constructive stance on the company, reflected in its Buy rating and the higher price target.
In other corporate updates, ON Semiconductor’s fourth-quarter 2025 results modestly outperformed expectations. The company reported earnings per share of $0.64, versus a forecast of $0.62, amounting to a 3.23% positive surprise. Quarterly revenue totaled $1.53 billion, which was in line with analyst estimates.
There were no announcements of material mergers or acquisitions accompanying the earnings release, and there have been no recent analyst upgrades or downgrades noted for the stock. Market participants are likely to monitor how AI data-center demand, the automotive recovery, and the scheduled business exits interact as inputs to the company’s near-term performance.
Key points
- Jefferies raised its ON Semiconductor price target to $73 from $65, maintaining a Buy rating.
- AI data-center growth, representing roughly 7% of revenue, is cited as a key offset to operational headwinds.
- Planned business exits across multiple quarters in 2026 introduce expected near-term volatility despite a favorable analyst outlook.
Risks and uncertainties
- ON’s revenue has fallen 16.13% over the last year, a material decline that could weigh on near-term performance - impacting the semiconductor sector and related capital markets.
- Phased exits of $50 million, $100 million and $100 million across the March, June and September quarters of 2026 could create earnings and revenue lumpiness, affecting industrial and investor sentiment.
- The automotive end market shows only modest improvement with no clear signs of restocking or an upcycle, posing uncertainty for the automotive semiconductor segment.