ON Semiconductor (1ON) AI Stock Analysis

Company Guidance

For the fourth quarter, onsemi anticipates revenue in the range of $1.715 billion to $1.815 billion, representing above seasonal growth of 2.5% sequentially at the midpoint; automotive revenue is expected to decrease high single-digit percentage points, industrial revenue to increase low double-digit percentage points, AI data center revenue to increase mid-teens percentage points, and the other revenue segment to increase high teens percentage points. Non-GAAP gross margin is expected to be between 41.5% and 43.5%, including approximately $8 million in stock-based compensation, non-GAAP operating expenses between $303 million and $318 million, including approximately $34 million in stock-based compensation, non-GAAP other income approximately $27 million, favorable, a non-GAAP tax rate of 15%, non-GAAP diluted share count of approximately 392 million shares, non-GAAP earnings per share in the range of $0.95 to $1.07, and capital expenditures in the range of $40 million to $50 million. Full-year capital expenditure is expected to be approximately 2% of revenue, 2027 capital expenditure is expected to be about 5%, AI data center revenue is expected to reach approximately $620 million in 2026, increasing 140% year-over-year, and in 2027 is expected to double off a higher base; automotive is expected to resume growth in 2027 in line with the long-term target, described as high single digit over SAAR.