ON Semiconductor Trails Chip Rally as Auto Demand Stays Soft

ON Semiconductor shares have delivered a positive return in 2026, but the stock has been left behind by the broader semiconductor rally. The gap widened during the latest selloff.

As of September 14, ON had gained 33.9% year to date and 50.2% over the previous 12 months, according to Barchart data. That sounds strong until it is set beside the iShares Semiconductor ETF, which had risen 65.6% this year and 95.1% over the same one-year period.

The more immediate picture was harsher. ON dropped 37.9% over three months, compared with a 16.3% decline for SOXX. Shares were down 43.6% from their June 3 52-week high of $134.92, and the stock had traded below both its 50-day and 200-day moving averages, a sign that momentum had broken even after the company’s spring rally.

Infineon Technologies has been a stronger comparator. Its American depositary shares had climbed 53.6% year to date and 80.1% over 12 months, outpacing ON across both periods.

The underperformance reflects what ON sells, and where it sells it. The company is heavily exposed to automotive and industrial applications, including power semiconductors, silicon carbide components and image sensors for driver-assistance systems. Those markets have been working through inventory corrections, softer electric-vehicle growth and weaker industrial demand.

The artificial-intelligence boom has offered less direct relief. Data-center spending has lifted companies with heavier exposure to high-speed computing, memory and networking, while ON’s portfolio remains tied more closely to power management and traditional analog demand. The distinction matters when investors reward near-term revenue acceleration.

There are signs of stabilization. ON reported second-quarter revenue of $1.60 billion and adjusted earnings of 74 cents per share on August 3, edging past Wall Street estimates of $1.59 billion and 72 cents. Management projected third-quarter revenue between $1.7 billion and $1.8 billion, with adjusted earnings of 81 cents to 93 cents per share.

That guidance points to improving utilization and demand, but the stock’s valuation still depends on execution. Until automotive and industrial customers rebuild inventories, ON may need a sharper earnings recovery to close the performance gap with faster-growing semiconductor peers.