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ON vs. NXPI: Which Automotive Chip Stock Is the Better Buy Now?
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Key Takeaways
NXP is benefiting from demand for software-defined vehicles and advanced networking solutions.
NXPI expects 2026 sales and EPS growth of 14.3% and 25.1%, outpacing ON forecasts.
ON is gaining traction in EV power solutions, AI data centers and zonal vehicle platforms.
As the automotive industry accelerates toward electric vehicles, advanced driver-assistance systems and smarter in-car technologies, semiconductor companies supplying these critical components are gaining increased investor attention.
ON Semiconductor Corporation (ON - Free Report) and NXP Semiconductors N.V. (NXPI - Free Report) are among the key players benefiting from this trend, thanks to their strong exposure to the fast-growing automotive chip market. While ON is capitalizing on rising demand for power and sensing solutions in EVs, NXP continues to strengthen its position in vehicle connectivity, radar and embedded processing. With both stocks offering distinct growth opportunities, investors may now be wondering which automotive chip company presents the better buying opportunity in the current market environment.
The Case for ON
ON Semiconductor is strengthening position in the automotive chip market by expanding its exposure to electric vehicles and next-generation vehicle architectures. The company is benefiting from rising demand for silicon carbide solutions, which are increasingly being used in EV powertrains to improve charging speed, energy efficiency and driving range.
Management highlighted that ON already has a strong presence in China’s fast-growing EV market, with its silicon carbide technology featured in a significant portion of new EV models showcased at the 2026 Beijing Auto Show. The company is also expanding partnerships with automakers such as Geely and NIO, reinforcing its role in advanced EV platforms.
Another positive for ON is its increasing traction in software-defined vehicles and zonal architecture. The company’s Treo platform is gaining momentum across automotive and industrial applications, helping it secure new design wins with major customers.
During the first quarter, ON began production shipments of its Ethernet solutions for a North American automaker’s next-generation zonal architecture. These products support faster in-vehicle communication and centralized computing systems, both of which are becoming essential for modern connected cars. Management also noted that Treo products carry attractive margin potential, which could support long-term profitability as adoption rises.
ON is also benefiting from improving business fundamentals and expanding opportunities beyond automotive. The company reported strong momentum in AI data centers, with revenues surging sequentially as broader adoption of power infrastructure drove broader adoption across the power infrastructure market.
Management expects AI data center revenues to double this year as ON leverages its broad portfolio of power technologies across hyperscaler and XPU platforms. At the same time, the company continues to improve margins through portfolio optimization, manufacturing efficiency and cost-control initiatives. These factors position ON to generate stronger operating leverage and sustainable earnings growth as demand recovers across its core markets.
The Case for NXPI
NXP Semiconductors continues to strengthen its automotive leadership through the growing exposure to software-defined vehicles and advanced vehicle networking. The company is benefiting from rising demand for its S32 processing platforms, automotive Ethernet solutions and imaging radar products, all of which are becoming increasingly important as automakers shift toward centralized computing architectures.
Management noted that these next-generation automotive programs are expanding NXPI’s semiconductor content per vehicle while deepening long-term relationships with customers. The company is also seeing strong traction in China, where faster adoption of advanced vehicle architectures is creating additional opportunities for its high-performance automotive processors and connectivity solutions.
Another major strength for NXPI is its growing industrial and edge AI business. The company reported strong momentum in industrial automation, robotics, energy storage and connected edge devices, supported by increasing adoption of its newer processing platforms such as i.MX, RT and MCX. Management believes the rise of physical AI and intelligent edge computing will drive higher demand for processing power, connectivity and security solutions, areas where NXPI already has an established position. The company also highlighted growing customer commitments tied to AI-enabled industrial systems, which should support durable long-term growth across its industrial and IoT portfolio.
NXPI is also emerging as a stronger player in data center infrastructure, an area investors may have previously overlooked. The company expects its data center-related revenues to more than double this year as it gains traction in system cooling, power supply management, networking control and board management applications.
Unlike companies focused directly on GPUs or accelerators, NXP is targeting the control and power management layers of AI data centers, where reliability, security and long product life cycles are critical. Alongside these growth opportunities, the company continues to benefit from margin expansion, disciplined cost management and strong customer adoption of its differentiated semiconductor portfolio, supporting confidence in its long-term growth outlook.
How Does the Zacks Consensus Estimate Compare for ON & NXPI?
The Zacks Consensus Estimate for ON’s 2026 sales implies an 8% year-over-year increase. The consensus estimate for earnings per share for 2026 is $3.09, compared with $2.35 reported in 2025. Earnings estimates for the current year have increased in the past 30 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NXPI’s 2026 sales and EPS implies year-over-year growth of 14.3% and 25.1%, respectively. Earnings estimates for 2026 have increased in the past 30 days.
Image Source: Zacks Investment Research
Price Performance & Valuation
ON stock has surged 134.1% in the past six months compared with the S&P 500’s growth of 10.2%. Conversely, NXPI’s shares have risen 63.4% in the same time frame.
Price Performance
Image Source: Zacks Investment Research
ON is trading at a forward 12-month price-to-sales ratio of 6.75X, above its median of 3.61X over the last year. NXPI’s forward sales multiple sits at 5.48X, up from its median of 4.31X over the same time frame.
P/S (F12M)
Image Source: Zacks Investment Research
End Notes
ON Semiconductor and NXP Semiconductors are well-positioned to benefit from the growing adoption of electric vehicles, software-defined vehicles and AI-driven infrastructure, making both attractive choices for long-term investors. ON appears stronger in power semiconductors, silicon carbide adoption and EV-related growth, while NXPI holds a broader leadership position in automotive processing, connectivity and industrial edge computing. With the stronger stock momentum, ON currently has greater leverage to the EV transition, but NXPI offers a more diversified business model with improved exposure to industrial AI and data center infrastructure.
Overall, NXPI seems slightly ahead because of its broader portfolio strength, accelerating company-specific growth drivers and stronger earnings outlook, making the stock a more balanced long-term investment option for investors seeking stability along with growth potential. However, growth-focused investors with a higher risk appetite may still find ON attractive due to its stronger momentum in EV power solutions. Both stocks currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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ON vs. NXPI: Which Automotive Chip Stock Is the Better Buy Now?
Key Takeaways
As the automotive industry accelerates toward electric vehicles, advanced driver-assistance systems and smarter in-car technologies, semiconductor companies supplying these critical components are gaining increased investor attention.
ON Semiconductor Corporation (ON - Free Report) and NXP Semiconductors N.V. (NXPI - Free Report) are among the key players benefiting from this trend, thanks to their strong exposure to the fast-growing automotive chip market. While ON is capitalizing on rising demand for power and sensing solutions in EVs, NXP continues to strengthen its position in vehicle connectivity, radar and embedded processing. With both stocks offering distinct growth opportunities, investors may now be wondering which automotive chip company presents the better buying opportunity in the current market environment.
The Case for ON
ON Semiconductor is strengthening position in the automotive chip market by expanding its exposure to electric vehicles and next-generation vehicle architectures. The company is benefiting from rising demand for silicon carbide solutions, which are increasingly being used in EV powertrains to improve charging speed, energy efficiency and driving range.
Management highlighted that ON already has a strong presence in China’s fast-growing EV market, with its silicon carbide technology featured in a significant portion of new EV models showcased at the 2026 Beijing Auto Show. The company is also expanding partnerships with automakers such as Geely and NIO, reinforcing its role in advanced EV platforms.
Another positive for ON is its increasing traction in software-defined vehicles and zonal architecture. The company’s Treo platform is gaining momentum across automotive and industrial applications, helping it secure new design wins with major customers.
During the first quarter, ON began production shipments of its Ethernet solutions for a North American automaker’s next-generation zonal architecture. These products support faster in-vehicle communication and centralized computing systems, both of which are becoming essential for modern connected cars. Management also noted that Treo products carry attractive margin potential, which could support long-term profitability as adoption rises.
ON is also benefiting from improving business fundamentals and expanding opportunities beyond automotive. The company reported strong momentum in AI data centers, with revenues surging sequentially as broader adoption of power infrastructure drove broader adoption across the power infrastructure market.
Management expects AI data center revenues to double this year as ON leverages its broad portfolio of power technologies across hyperscaler and XPU platforms. At the same time, the company continues to improve margins through portfolio optimization, manufacturing efficiency and cost-control initiatives. These factors position ON to generate stronger operating leverage and sustainable earnings growth as demand recovers across its core markets.
The Case for NXPI
NXP Semiconductors continues to strengthen its automotive leadership through the growing exposure to software-defined vehicles and advanced vehicle networking. The company is benefiting from rising demand for its S32 processing platforms, automotive Ethernet solutions and imaging radar products, all of which are becoming increasingly important as automakers shift toward centralized computing architectures.
Management noted that these next-generation automotive programs are expanding NXPI’s semiconductor content per vehicle while deepening long-term relationships with customers. The company is also seeing strong traction in China, where faster adoption of advanced vehicle architectures is creating additional opportunities for its high-performance automotive processors and connectivity solutions.
Another major strength for NXPI is its growing industrial and edge AI business. The company reported strong momentum in industrial automation, robotics, energy storage and connected edge devices, supported by increasing adoption of its newer processing platforms such as i.MX, RT and MCX. Management believes the rise of physical AI and intelligent edge computing will drive higher demand for processing power, connectivity and security solutions, areas where NXPI already has an established position. The company also highlighted growing customer commitments tied to AI-enabled industrial systems, which should support durable long-term growth across its industrial and IoT portfolio.
NXPI is also emerging as a stronger player in data center infrastructure, an area investors may have previously overlooked. The company expects its data center-related revenues to more than double this year as it gains traction in system cooling, power supply management, networking control and board management applications.
Unlike companies focused directly on GPUs or accelerators, NXP is targeting the control and power management layers of AI data centers, where reliability, security and long product life cycles are critical. Alongside these growth opportunities, the company continues to benefit from margin expansion, disciplined cost management and strong customer adoption of its differentiated semiconductor portfolio, supporting confidence in its long-term growth outlook.
How Does the Zacks Consensus Estimate Compare for ON & NXPI?
The Zacks Consensus Estimate for ON’s 2026 sales implies an 8% year-over-year increase. The consensus estimate for earnings per share for 2026 is $3.09, compared with $2.35 reported in 2025. Earnings estimates for the current year have increased in the past 30 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NXPI’s 2026 sales and EPS implies year-over-year growth of 14.3% and 25.1%, respectively. Earnings estimates for 2026 have increased in the past 30 days.
Image Source: Zacks Investment Research
Price Performance & Valuation
ON stock has surged 134.1% in the past six months compared with the S&P 500’s growth of 10.2%. Conversely, NXPI’s shares have risen 63.4% in the same time frame.
Price Performance
Image Source: Zacks Investment Research
ON is trading at a forward 12-month price-to-sales ratio of 6.75X, above its median of 3.61X over the last year. NXPI’s forward sales multiple sits at 5.48X, up from its median of 4.31X over the same time frame.
P/S (F12M)
Image Source: Zacks Investment Research
End Notes
ON Semiconductor and NXP Semiconductors are well-positioned to benefit from the growing adoption of electric vehicles, software-defined vehicles and AI-driven infrastructure, making both attractive choices for long-term investors. ON appears stronger in power semiconductors, silicon carbide adoption and EV-related growth, while NXPI holds a broader leadership position in automotive processing, connectivity and industrial edge computing. With the stronger stock momentum, ON currently has greater leverage to the EV transition, but NXPI offers a more diversified business model with improved exposure to industrial AI and data center infrastructure.
Overall, NXPI seems slightly ahead because of its broader portfolio strength, accelerating company-specific growth drivers and stronger earnings outlook, making the stock a more balanced long-term investment option for investors seeking stability along with growth potential. However, growth-focused investors with a higher risk appetite may still find ON attractive due to its stronger momentum in EV power solutions. Both stocks currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.