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STM vs. ON: Which EV Semiconductor Stock Is More Compelling?
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Key Takeaways
STM posted strong automotive growth, backed by EV design wins and rising SiC demand.
STM expects 21.8% 2026 revenue growth and a 145.3% EPS increase, ahead of ON's estimates.
ON's EV opportunity remains strong, but capacity constraints are limiting near-term automotive growth.
The semiconductor industry is becoming increasingly important to the automotive sector as electric vehicles (EVs) demand more advanced chips for power management, connectivity, safety and vehicle electrification. Against this backdrop, STMicroelectronics N.V. (STM - Free Report) and ON Semiconductor Corporation (ON - Free Report) offer investors exposure to the growing automotive semiconductor market, but with different business strengths and growth opportunities.
As both companies navigate uneven demand, evolving EV adoption and the broader semiconductor cycle, a closer comparison of their growth prospects, financial performance and strategic positioning can help determine which stock presents the more compelling investment opportunity.
The Case for STM
STMicroelectronics delivered a strong performance in automotive during the second quarter, with revenues rising 14% sequentially and 16% year over year. Growth was supported by application-specific ICs and sensors used in electric powertrains, ADAS and other automotive applications. The company also continued to secure design wins across hybrid, electric and conventional vehicles, including onboard chargers, powertrain and active-suspension applications.
STM's power semiconductor business is showing signs of improvement, particularly in silicon carbide (SiC), which is important for EV powertrains and higher-voltage vehicle architectures. Management said second-quarter 2026 SiC revenues grew in the low teens year over year and roughly mid-30s sequentially, supported by strong bookings and a growing backlog. STM expects SiC revenues to increase at a double-digit rate in 2026, backed by existing design wins and visible backlog.
STM's broader business recovery provides additional support for its EV opportunity. Second-quarter revenues increased 26.1% year over year to $3.49 billion, while automotive sales rose 16%. Gross margin improved 130 basis points year over year to 34.8%, and the company returned to profitability, reporting non-GAAP EPS of 31 cents versus a loss of 11 cents a year earlier. Management also expects third-quarter 2026 revenues of about $3.7 billion at the midpoint, up 16.2% year over year.
Despite the improving business trends, STM's profitability is still being weighed down by its manufacturing reshaping program. Management said technology transfers, product qualifications and related costs will continue to pressure gross margins through the second half of 2026. The company also expects some temporary supply constraints as it transitions SiC production from 6-inch to 8-inch wafers and analog production from 8-inch to 12-inch technology.
The Case for ON
ON Semiconductor is gaining traction in China’s electric-vehicle market, where automotive revenues increased 13% in the first half of 2026 despite overall vehicle sales declining 4%. The company is benefiting from higher semiconductor content per vehicle and market-share gains with customers including Geely Zeekr and Xiaomi. Management expects automotive silicon carbide revenues in China to increase 60-70% year over year as existing programs ramp and new vehicle platforms launch.
ON is expanding its role in next-generation EV architectures through a broader portfolio of power, sensing and connectivity products. ON Semiconductor’s design win on Rivian’s R2 platform is one example, with ON’s MOSFETs supporting power distribution and its silicon carbide solutions used in the onboard charging system. The company is also seeing increasing contributions from newer products such as 10BASE-T1S Ethernet and inductive and ultrasonic sensing, supporting its goal of growing faster than overall vehicle production through higher content and market-share gains.
ON's improving operating performance strengthens the investment case beyond its EV opportunity. Second-quarter revenues rose 9% year over year to $1.6 billion, while non-GAAP gross margin expanded to 39.3%, up 80 basis points sequentially. Free cash flow reached $425 million, and the company returned $332 million to its shareholders through share repurchases. Management expects further margin expansion as higher utilization flows through the income statement, with third-quarter gross margin guided to 40-42% and EPS of 81 cents-93 cents.
The key risk is that ON had to prioritize rapidly accelerating AI data-center demand over some automotive and industrial shipments during the second quarter because of supply constraints. Automotive revenues consequently declined 2% sequentially, although the metric still increased 7% year over year. Management expects auto revenues to grow at a low-single-digit rate in the third quarter, while manufacturing catches up with demand. This suggests that near-term automotive growth could remain somewhat constrained by capacity allocation even as the longer-term EV opportunity remains strong.
What Do Analyst Estimates Signal for STM and ON?
The Zacks Consensus Estimate projects STMicroelectronics’ 2026 revenues to increase 21.8% year over year, while earnings per share are expected to surge 145.3% to $1.30, up from 53 cents in 2025. The upward revisions of STM’s 2026 estimates over the past 30 days further suggest growing analyst confidence in its earnings recovery and business outlook.
Image Source: Zacks Investment Research
For ON Semiconductor, the Zacks Consensus Estimate calls for 9.5% year-over-year revenue growth in 2026, with earnings per share expected to rise 37.5%. Analysts have also raised their 2026 earnings estimates over the past 30 days, pointing to improving expectations for ON’s profitability and growth prospects. Overall, STM has the edge on expected revenue and EPS growth, while both companies are benefiting from upward revisions to earnings estimates.
Image Source: Zacks Investment Research
Price Performance & Valuation
STM stock has surged 47.1% in the past six months compared with the S&P 500’s growth of 11%. Conversely, ON’s shares have risen 9% in the same time frame.
Price Performance
Image Source: Zacks Investment Research
STM is trading at a forward 12-month price-to-earnings ratio of 21.88X, below its median of 26.04X over the last year. ON’s forward earnings multiple sits at 17.89X, down from its median of 20.17X over the same time frame.
P/E (F12M)
Image Source: Zacks Investment Research
End Notes
Although both stocks offer attractive exposure to the EV semiconductor market, STM has a slight edge over ON in this faceoff. STM's stronger expected growth, improving earnings outlook, solid EV design-win pipeline and accelerating silicon carbide momentum make its growth story more compelling.
ON also has strong EV and SiC opportunities, particularly in China, along with improving margins and robust cash generation. However, near-term automotive growth is being affected by capacity constraints and the prioritization of AI data-center demand. STM's relatively attractive valuation and stronger earnings-growth prospects further tilt the comparison in its favor. In conclusion, both STM and ON carry a Zacks Rank #3 (Hold), but the former emerges as the slightly more compelling EV semiconductor stock.
View the Zacks #1 Rank List
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STM vs. ON: Which EV Semiconductor Stock Is More Compelling?
Key Takeaways
The semiconductor industry is becoming increasingly important to the automotive sector as electric vehicles (EVs) demand more advanced chips for power management, connectivity, safety and vehicle electrification. Against this backdrop, STMicroelectronics N.V. (STM - Free Report) and ON Semiconductor Corporation (ON - Free Report) offer investors exposure to the growing automotive semiconductor market, but with different business strengths and growth opportunities.
As both companies navigate uneven demand, evolving EV adoption and the broader semiconductor cycle, a closer comparison of their growth prospects, financial performance and strategic positioning can help determine which stock presents the more compelling investment opportunity.
The Case for STM
STMicroelectronics delivered a strong performance in automotive during the second quarter, with revenues rising 14% sequentially and 16% year over year. Growth was supported by application-specific ICs and sensors used in electric powertrains, ADAS and other automotive applications. The company also continued to secure design wins across hybrid, electric and conventional vehicles, including onboard chargers, powertrain and active-suspension applications.
STM's power semiconductor business is showing signs of improvement, particularly in silicon carbide (SiC), which is important for EV powertrains and higher-voltage vehicle architectures. Management said second-quarter 2026 SiC revenues grew in the low teens year over year and roughly mid-30s sequentially, supported by strong bookings and a growing backlog. STM expects SiC revenues to increase at a double-digit rate in 2026, backed by existing design wins and visible backlog.
STM's broader business recovery provides additional support for its EV opportunity. Second-quarter revenues increased 26.1% year over year to $3.49 billion, while automotive sales rose 16%. Gross margin improved 130 basis points year over year to 34.8%, and the company returned to profitability, reporting non-GAAP EPS of 31 cents versus a loss of 11 cents a year earlier. Management also expects third-quarter 2026 revenues of about $3.7 billion at the midpoint, up 16.2% year over year.
Despite the improving business trends, STM's profitability is still being weighed down by its manufacturing reshaping program. Management said technology transfers, product qualifications and related costs will continue to pressure gross margins through the second half of 2026. The company also expects some temporary supply constraints as it transitions SiC production from 6-inch to 8-inch wafers and analog production from 8-inch to 12-inch technology.
The Case for ON
ON Semiconductor is gaining traction in China’s electric-vehicle market, where automotive revenues increased 13% in the first half of 2026 despite overall vehicle sales declining 4%. The company is benefiting from higher semiconductor content per vehicle and market-share gains with customers including Geely Zeekr and Xiaomi. Management expects automotive silicon carbide revenues in China to increase 60-70% year over year as existing programs ramp and new vehicle platforms launch.
ON is expanding its role in next-generation EV architectures through a broader portfolio of power, sensing and connectivity products. ON Semiconductor’s design win on Rivian’s R2 platform is one example, with ON’s MOSFETs supporting power distribution and its silicon carbide solutions used in the onboard charging system. The company is also seeing increasing contributions from newer products such as 10BASE-T1S Ethernet and inductive and ultrasonic sensing, supporting its goal of growing faster than overall vehicle production through higher content and market-share gains.
ON's improving operating performance strengthens the investment case beyond its EV opportunity. Second-quarter revenues rose 9% year over year to $1.6 billion, while non-GAAP gross margin expanded to 39.3%, up 80 basis points sequentially. Free cash flow reached $425 million, and the company returned $332 million to its shareholders through share repurchases. Management expects further margin expansion as higher utilization flows through the income statement, with third-quarter gross margin guided to 40-42% and EPS of 81 cents-93 cents.
The key risk is that ON had to prioritize rapidly accelerating AI data-center demand over some automotive and industrial shipments during the second quarter because of supply constraints. Automotive revenues consequently declined 2% sequentially, although the metric still increased 7% year over year. Management expects auto revenues to grow at a low-single-digit rate in the third quarter, while manufacturing catches up with demand. This suggests that near-term automotive growth could remain somewhat constrained by capacity allocation even as the longer-term EV opportunity remains strong.
What Do Analyst Estimates Signal for STM and ON?
The Zacks Consensus Estimate projects STMicroelectronics’ 2026 revenues to increase 21.8% year over year, while earnings per share are expected to surge 145.3% to $1.30, up from 53 cents in 2025. The upward revisions of STM’s 2026 estimates over the past 30 days further suggest growing analyst confidence in its earnings recovery and business outlook.
Image Source: Zacks Investment Research
For ON Semiconductor, the Zacks Consensus Estimate calls for 9.5% year-over-year revenue growth in 2026, with earnings per share expected to rise 37.5%. Analysts have also raised their 2026 earnings estimates over the past 30 days, pointing to improving expectations for ON’s profitability and growth prospects. Overall, STM has the edge on expected revenue and EPS growth, while both companies are benefiting from upward revisions to earnings estimates.
Image Source: Zacks Investment Research
Price Performance & Valuation
STM stock has surged 47.1% in the past six months compared with the S&P 500’s growth of 11%. Conversely, ON’s shares have risen 9% in the same time frame.
Price Performance
Image Source: Zacks Investment Research
STM is trading at a forward 12-month price-to-earnings ratio of 21.88X, below its median of 26.04X over the last year. ON’s forward earnings multiple sits at 17.89X, down from its median of 20.17X over the same time frame.
P/E (F12M)
Image Source: Zacks Investment Research
End Notes
Although both stocks offer attractive exposure to the EV semiconductor market, STM has a slight edge over ON in this faceoff. STM's stronger expected growth, improving earnings outlook, solid EV design-win pipeline and accelerating silicon carbide momentum make its growth story more compelling.
ON also has strong EV and SiC opportunities, particularly in China, along with improving margins and robust cash generation. However, near-term automotive growth is being affected by capacity constraints and the prioritization of AI data-center demand. STM's relatively attractive valuation and stronger earnings-growth prospects further tilt the comparison in its favor. In conclusion, both STM and ON carry a Zacks Rank #3 (Hold), but the former emerges as the slightly more compelling EV semiconductor stock.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.