It has been about a month since the last earnings report for ON Semiconductor Corp. (ON Quick QuoteON - Free Report) . Shares have added about 25.3% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is ON Semiconductor Corp. due for a pullback? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for ON Semiconductor Corporation before we dive into how investors and analysts have reacted as of late.

ON Q1 Earnings Beat Estimates, Power-Driven Demand Aids Top Line

ON Semiconductor or onsemi delivered solid first-quarter 2026 results as improving demand signals and accelerating AI data center momentum lifted performance. The company reported non-GAAP earnings of 64 cents per share, up 16.4% year over year, beating the Zacks Consensus Estimate by 4.92%. 

Revenues rose 4.7% year over year to $1.513 billion, topping the consensus mark by 1.76%.

ON’s Portfolio Mix Benefits From Power-Led Demand

Management emphasized that demand strengthened as the quarter progressed, supported by stronger order patterns and an increase in short lead-time orders. The company also highlighted continued traction from higher-value programs tied to AI infrastructure and advanced automotive power platforms.
 
A key narrative was the “inflection point” in AI data center demand, with onsemi describing broader adoption across the power tree spanning multiple chip vendors and leading hyperscalers. That acceleration helped offset softness elsewhere and reinforced the company’s focus on electrification and energy-efficient power conversion.

Robust Power Solutions Aids ON’s Top-Line Growth

The quarterly mix underscored relative strength in Power Solutions Group (PSG), which accounted for 48.7% of revenues. PSG revenues were $736.6 million, up 14.2% year over year and 2% sequentially, reflecting improved demand signals and better positioning in higher-value power applications.

Analog & Mixed-Signal Group revenues were $540.4 million, down 5% year over year and 3% sequentially. Intelligent Sensing Group revenues totaled $236.3 million, up 1% from the year-ago quarter but down 5% from the prior quarter. Management pointed to a market recovery path that is being led by specific application ramps rather than a uniform regional rebound.

ON’s Operating Leverage Shows Up in Expense Discipline

On Semiconductor reported a non-GAAP gross margin of 38.5% in the reported quarter, down 150 basis points (bps). 

Cost actions remained a notable theme. Non-GAAP operating expenses were $293.7 million in the quarter, down 7% year over year, reflecting ongoing cost optimization. 

That discipline supported profitability despite a still-mixed demand backdrop. Non-GAAP operating margin was 19.1%, up 90 bps year over year. The company also reiterated that its leaner cost structure is designed to deliver operating leverage as volumes recover and higher-margin products ramp.

onsemi Highlights Manufacturing and Inventory Dynamics

Operationally, onsemi noted improved manufacturing execution as it responded to strengthening demand signals. Manufacturing utilization increased sequentially to 77% as production ramped during the reported quarter, with expectations for utilization to be flat to slightly higher in the second quarter. 

Balance sheet metrics reflected targeted inventory positioning. Inventory increased to 201 days from 192 days in the prior quarter, a move attributed to higher internal loadings and customer commitments. The company also disclosed that strategic inventory stood at 75 days (down from 76 days), with base inventory at 126 days excluding strategic builds, while distribution inventory was flat at 10.8 weeks.

ON’s Cash Returns Stand Out Alongside Solid Liquidity

Capital returns remained aggressive. The company repurchased $345.7 million of shares during the quarter at an average price of $60.54, a level management characterized as opportunistic relative to free cash flow generation.

Liquidity stayed sizable, with cash and short-term investments of approximately $2.4 billion and total liquidity of $3.9 billion, including $1.5 billion available on its revolver.

Cash from operations was $239.1 million and free cash flow was $217.2 million, reflecting continued cash generation alongside modest capital spending.

onsemi’s Q2 View Points to Sequential Upside

For the second quarter of 2026, onsemi guided revenues of $1.535-$1.635 billion. The company expects non-GAAP earnings in the range of 65-77 cents, with non-GAAP gross margin projected at 38-40% and non-GAAP operating expenses of $287-$302 million.

Management also discussed planned noncore revenue exits continuing into the second quarter, while expressing confidence that improving visibility and strengthening order patterns support a recovery trajectory. In addition, leadership reiterated expectations that AI data center revenue will double year over year in 2026, reflecting expanding customer engagement across the power tree and broader program ramps.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

The consensus estimate has shifted 8.94% due to these changes.

VGM Scores

At this time, ON Semiconductor Corp. has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for value investors.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise ON Semiconductor Corp. has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

ON Semiconductor Corp. belongs to the Zacks Semiconductor - Analog and Mixed industry. Another stock from the same industry, NXP Semiconductors (NXPI Quick QuoteNXPI - Free Report) , has gained 10.7% over the past month. More than a month has passed since the company reported results for the quarter ended March 2026.

NXP reported revenues of $3.18 billion in the last reported quarter, representing a year-over-year change of +12.2%. EPS of $3.05 for the same period compares with $2.64 a year ago.

NXP is expected to post earnings of $3.52 per share for the current quarter, representing a year-over-year change of +29.4%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for NXP. Also, the stock has a VGM Score of D.