Summary
Stifel left its rating on ON Semiconductor (NASDAQ:ON) unchanged at Hold with a $60.00 price target after the chipmaker published its fourth-quarter 2025 results. The firm flagged a slight shortfall versus its revenue forecast for the first quarter of 2026, even as certain end markets showed signs of improvement and ON highlighted notable AI-related revenue for calendar year 2025.
Quarterly results and valuation
ON reported revenue of $1.53 billion for Q4 2025, a 1.3% sequential decline and an 11.2% drop compared with the year-ago period. The shares trade at $66.74 with a price-to-earnings ratio of 88.46, placing the stock above Stifel’s $60 price target. InvestingPro data referenced alongside the results shows the company trading close to its 52-week high of $66.86.
Over the trailing twelve months ON’s overall revenue has declined 16.13% to $6.19 billion, according to the InvestingPro figures cited with the results.
Business trends: automotive, AI and segment performance
Company management communicated that automotive inventory digestion is largely complete. Separately, ON’s AI data center operations generated more than $250 million in revenue during calendar year 2025. That AI contribution coincides with a notable equity performance: the stock has returned 36.59% over the past six months.
Management also disclosed combined revenues of $3.015 billion for a recent reporting period, which missed the consensus estimate of $3.070 billion. Within that total, the automotive and industrial segments exceeded expectations, while the "Other" business underperformed due to non-core business exits and consumer weakness.
Guidance and analyst reactions
For the first quarter of 2026 management guided to a revenue midpoint of $1.49 billion - down 2.6% sequentially but up 3.1% year-over-year. That midpoint was 1.0% below Stifel’s estimate of $1.50 billion. Despite the slight miss, InvestingPro indicates that 15 analysts have moved to raise their earnings estimates for the upcoming period.
Analyst responses to the quarter and guidance were mixed. Cantor Fitzgerald retained a Neutral rating with a $60 price target, reflecting the mixed quarter and guidance. Truist Securities increased its price target to $66, citing modest revenue disappointments but potential margin upside. Piper Sandler and KeyBanc each lifted their price targets to $75 and kept an Overweight rating; Piper Sandler noted solid results were tempered by non-core business exits, while KeyBanc pointed to product exits offsetting signs of a cyclical recovery. Needham raised its target to $72 on expectations of an earnings beat and margin expansion.
Stifel's longer-term view and financial position
Stifel reiterated its view that ON’s long-term growth profile is attainable. The firm highlighted content opportunities per data center rack that it expects to scale to approximately $105,000 by 2030 and noted that the Treo platform funnel has surpassed $1 billion in design wins. Financial health metrics cited by InvestingPro show a rating of "GOOD" and a current ratio of 5.23, indicating strong liquidity to support growth initiatives.
Conclusion
The Q4 results portray a company navigating mixed demand patterns: recovery in some industrial end markets and meaningful AI-related revenue, alongside headwinds from non-core exits and softer consumer demand. Stifel's Hold rating reflects that mix, and analyst reactions underscore the divergence in views on how quickly cyclical recovery and portfolio adjustments will translate into sustained revenue and margin improvement.
Key points and risks are summarized below.
Key points
- Stifel reiterated a Hold rating with a $60.00 price target after Q4 2025 results.
- Q4 revenue was $1.53 billion, down 1.3% sequentially and down 11.2% year-over-year; overall revenue declined 16.13% over the last twelve months to $6.19 billion.
- Management said automotive inventory digestion is largely complete and AI data center revenue exceeded $250 million in calendar year 2025, supporting a 36.59% six-month stock return.
Risks and uncertainties
- Revenue guidance for Q1 2026 missed Stifel’s estimate by 1.0% at the midpoint, reflecting near-term forecast risk - this affects semiconductor and related industrial sectors.
- The "Other" segment underperformed due to non-core business exits and consumer weakness, presenting execution and portfolio-transition risk for consumer-facing semiconductor products.
- Mixed analyst views and a range of price targets indicate uncertainty in how margin expansion and cyclical recovery will materialize across the semiconductor market and data center demand.