We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Are Industrial Markets Likely to Drive Strong Growth for VSH in 2026?
Read MoreHide Full Article
Key Takeaways
Vishay's industrial power revenues rose 6.5% sequentially in Q1, marking five straight quarters of growth.
Vishay is seeing demand from AI infrastructure, renewable energy, smart metering, and factory automation.
Higher industrial volume lifted gross margin to 21% as factory utilization and backlog conversion improved.
Vishay Intertechnology’s (VSH - Free Report) first-quarter 2026 results suggest that the company’s industrial segment is emerging as its most important growth engine, reinforcing management’s broader Vishay 3.0 transformation strategy.
Industrial power revenues increased 6.5% sequentially in the first quarter, marking the fifth consecutive quarter of growth. This signals sustained recovery in one of Vishay’s high-potential end markets.
Management highlighted that the strength in demand is being driven by accelerating investments in electrical power transmission, renewable energy systems, smart metering, factory automation, and increasingly AI-related infrastructure. All these factors are helping expand the demand for semiconductors and passive components globally.
A major driver behind this momentum is infrastructure modernization. In North America, customers are ramping production for projects tied directly to AI infrastructure build-outs, particularly around industrial server power supplies and next-generation 800-volt power management systems for data centers.
Europe also remains a critical contributor, with exceptionally strong orders from smart-grid customers. Vishay secured two new smart-grid development projects in the United Kingdom, highlighting its growing exposure to long-duration energy infrastructure spending. Bookings strength was particularly notable across Europe and the Americas, where customers are rebuilding inventory and prioritizing supply assurance amid tightening industry conditions.
From a profitability standpoint, the industrial recovery is playing an increasingly important role in operational leverage. Higher volumes helped lift companywide gross margin to 21%, while improving factory utilization and faster backlog conversion are supporting better absorption of fixed manufacturing costs.
With industrial demand broadening across automation, power infrastructure, and AI-driven energy systems, Vishay appears well positioned to use this segment. This is likely to be a core driver of both margin expansion and sustained revenue acceleration throughout 2026, making industrial markets arguably the company’s strongest long-term growth pillar.
Peer Updates
ON Semiconductor’s (ON - Free Report) first-quarter 2026 results suggest that industrial markets are becoming an increasingly important pillar of its growth recovery story, with AI data centers remaining the headline opportunity. Industrial revenues totaled $417 million, down 6% sequentially but ahead of expectations, with management highlighting broad-based strength across traditional industrial markets for the second consecutive quarter.
The company is seeing rising demand tied to energy storage systems, microgrids, industrial automation, robotics, and power infrastructure, benefiting from what management described as the “AI halo effect.”
ON expects its industrial business to grow mid-single digits sequentially in the second quarter. Energy infrastructure and renewable deployments, supported by silicon carbide modules, are expected to accelerate through 2026, positioning industrial as a durable long-term growth driver alongside automotive and AI infrastructure.
STMicroelectronics’ (STM - Free Report) first-quarter 2026 earnings highlight industrial markets as a critical engine for its 2026 growth acceleration. This is supported by broad exposure to automation, robotics, and AI infrastructure. Industrial revenues improved 26% year over year despite declining 1% sequentially.
The management emphasized that distributor inventories have now normalized, setting up healthier demand recovery. Growth is increasingly tied to industrial transformation trends, physical AI adoption, robotics, building automation, power systems, and healthcare applications.
STM is strengthening its exposure to next-generation industrial automation with its strategic collaboration with NVIDIA for integrating sensors, microcontrollers, and motor-control solutions into robotics ecosystems. Management expects solid growth in general-purpose microcontrollers throughout 2026, making industrial demand recovery a major contributor to double-digit revenue growth beyond broader semiconductor market expansion.
VSH’s Price Performance, Valuation and Estimates
Shares of VSH have skyrocketed 317% so far this year compared with the sector’s 20.2% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, VSH trades at a forward price-to-sales ratio of 2.19, below the industry average. It is higher than its five-year median of 0.87. Vishay carries a Value Score of D.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for VSH’s fiscal 2026 earnings implies a 1600% improvement from the year-ago period’s level.
View the Zacks #1 Rank List
Image: Bigstock
Are Industrial Markets Likely to Drive Strong Growth for VSH in 2026?
Key Takeaways
Vishay Intertechnology’s (VSH - Free Report) first-quarter 2026 results suggest that the company’s industrial segment is emerging as its most important growth engine, reinforcing management’s broader Vishay 3.0 transformation strategy.
Industrial power revenues increased 6.5% sequentially in the first quarter, marking the fifth consecutive quarter of growth. This signals sustained recovery in one of Vishay’s high-potential end markets.
Management highlighted that the strength in demand is being driven by accelerating investments in electrical power transmission, renewable energy systems, smart metering, factory automation, and increasingly AI-related infrastructure. All these factors are helping expand the demand for semiconductors and passive components globally.
A major driver behind this momentum is infrastructure modernization. In North America, customers are ramping production for projects tied directly to AI infrastructure build-outs, particularly around industrial server power supplies and next-generation 800-volt power management systems for data centers.
Europe also remains a critical contributor, with exceptionally strong orders from smart-grid customers. Vishay secured two new smart-grid development projects in the United Kingdom, highlighting its growing exposure to long-duration energy infrastructure spending. Bookings strength was particularly notable across Europe and the Americas, where customers are rebuilding inventory and prioritizing supply assurance amid tightening industry conditions.
From a profitability standpoint, the industrial recovery is playing an increasingly important role in operational leverage. Higher volumes helped lift companywide gross margin to 21%, while improving factory utilization and faster backlog conversion are supporting better absorption of fixed manufacturing costs.
With industrial demand broadening across automation, power infrastructure, and AI-driven energy systems, Vishay appears well positioned to use this segment. This is likely to be a core driver of both margin expansion and sustained revenue acceleration throughout 2026, making industrial markets arguably the company’s strongest long-term growth pillar.
Peer Updates
ON Semiconductor’s (ON - Free Report) first-quarter 2026 results suggest that industrial markets are becoming an increasingly important pillar of its growth recovery story, with AI data centers remaining the headline opportunity. Industrial revenues totaled $417 million, down 6% sequentially but ahead of expectations, with management highlighting broad-based strength across traditional industrial markets for the second consecutive quarter.
The company is seeing rising demand tied to energy storage systems, microgrids, industrial automation, robotics, and power infrastructure, benefiting from what management described as the “AI halo effect.”
ON expects its industrial business to grow mid-single digits sequentially in the second quarter. Energy infrastructure and renewable deployments, supported by silicon carbide modules, are expected to accelerate through 2026, positioning industrial as a durable long-term growth driver alongside automotive and AI infrastructure.
STMicroelectronics’ (STM - Free Report) first-quarter 2026 earnings highlight industrial markets as a critical engine for its 2026 growth acceleration. This is supported by broad exposure to automation, robotics, and AI infrastructure. Industrial revenues improved 26% year over year despite declining 1% sequentially.
The management emphasized that distributor inventories have now normalized, setting up healthier demand recovery. Growth is increasingly tied to industrial transformation trends, physical AI adoption, robotics, building automation, power systems, and healthcare applications.
STM is strengthening its exposure to next-generation industrial automation with its strategic collaboration with NVIDIA for integrating sensors, microcontrollers, and motor-control solutions into robotics ecosystems. Management expects solid growth in general-purpose microcontrollers throughout 2026, making industrial demand recovery a major contributor to double-digit revenue growth beyond broader semiconductor market expansion.
VSH’s Price Performance, Valuation and Estimates
Shares of VSH have skyrocketed 317% so far this year compared with the sector’s 20.2% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, VSH trades at a forward price-to-sales ratio of 2.19, below the industry average. It is higher than its five-year median of 0.87. Vishay carries a Value Score of D.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for VSH’s fiscal 2026 earnings implies a 1600% improvement from the year-ago period’s level.
Image Source: Zacks Investment Research
The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.