AI + Automotive Dual Engines Driving Growth! StoneX Initiates onsemi (ON.US) with a "Buy" Rating, Stock Price Could Rise Another 50%

Brokerage StoneX initiated coverage of ON Semiconductor Corporation (ON.US) on Thursday with a "Buy" rating and a price target of $110, nearly 50% above the latest closing price. Analyst Gary Mobley believes onsemi is one of the best ways to capture "the strong momentum of an expanding chip cycle." StoneX said onsemi's growth prospects extend beyond the AI data center business, with its automotive business providing another path to expansion. Bullish Thesis: Beyond AI, the Automotive Business Offers Additional Growth StoneX noted that rising semiconductor content in vehicles is the key DRIVE for onsemi's automotive business. The firm also highlighted that onsemi has a presence in the AI data center power infrastructure space, where its technology helps manage and convert power. At its investor day event last month, onsemi unveiled an ambitious growth roadmap. The company expects AI data center revenue to more than double in 2026 and 2027. By 2030, annual revenue from this business will exceed $2.5 billion. The company also set a revenue compound annual growth rate target of 12% to 14% from 2026 to 2030. This target is supported by opportunities in the automotive, industrial, and AI data center markets. onsemi's automotive strategy focuses on increasing chip content per vehicle. This strategy is expected to benefit as automakers adopt electrification, advanced driver assistance systems, and software-defined architectures. Recent Developments: Energy Storage Partnership, Acquisition Adjustment, and Guidance onsemi is also expanding its energy infrastructure footprint. On Wednesday, the company announced that renewable energy technology company Sungrow Power Supply has adopted its silicon carbide hybrid power modules for the PowerTitan 3.0 energy storage platform. Earlier this month, onsemi amended its agreement to acquire Synaptics (SYNA.US). The company replaced the original all-stock deal worth approximately $7 billion with a $5.7 billion cash transaction. The acquisition aims to expand onsemi's capabilities in connected computing. onsemi's second-quarter revenue rose 9% year-over-year to $1.60 billion. CEO Hassane El-Khoury said AI data centers remain the company's fastest-growing business, driven by growing demand for its high-voltage power solutions. For the third quarter, onsemi provided revenue guidance of $1.65 billion to $1.75 billion. On Stocktwits, retail sentiment toward onsemi stock remains at "extremely bearish" levels. A month ago, retail sentiment was at "bullish" levels. Year to date, onsemi shares have risen more than 29%. By comparison, the iShares Semiconductor ETF, which includes the stock, has gained more than 65% over the same period.