Stock Analysis | On Semiconductor Outlook - Mixed Analysts, Strong Technicals, and a Shifting Semiconductor Landscape

Market Snapshot - A Mixed Picture for On Semiconductor

The semiconductor sector is in flux with recent political developments and mixed analyst signals. On Semiconductor (ON) is currently down by 16.39% in recent sessions. Despite this, our internal diagnostic scores suggest a nuanced view with technical indicators showing strength, while fundamentals are weaker and analyst consensus is spread across several ratings.

News Highlights - Tariffs and Market Growth

• Trump Announces 100% Tariffs on Semiconductors: President Donald Trump's announcement of a 100% tariff on semiconductors has caused ripple effects in the market. ON's sector is likely to be affected, with potential supply chain disruptions and a shift in market sentiment. This tariff could weigh on global semiconductor demand and impact On Semiconductor's international sales.
• India’s Semiconductor Market Growth: India is projected to see its semiconductor market grow over two-fold to Rs 9.6 lakh crore by 2030. This growth in emerging markets could offer long-term opportunities for semiconductor companies, including ON, despite current headwinds from the U.S. tariff announcement.
• Applied Materials Investing in U.S. Chip Manufacturing: Applied Materials has joined Apple and Texas Instruments to strengthen U.S. chip manufacturing. This move could lead to increased domestic production, potentially affecting On Semiconductor's role in global supply chains.

Analyst Views & Fundamentals - A Diverse Range of Opinions

Average Rating Score: The simple mean analyst rating for ON is 3.77, while the performance-weighted rating is 2.41. These scores suggest a generally neutral or bearish sentiment, with a spread of opinions among analysts.

• Rating Consistency: Analysts have given a range of ratings: 7 Neutral, 4 Strong Buy, and 2 Buy. This indicates a lack of consensus and highlights the uncertainty surrounding the stock's near-term performance.
• Price Trend Alignment: The current price trend of a 16.39% drop appears to align with the neutral to bearish market expectations.
• Fundamental Factors: Key fundamental factors and their values are as follows:
  • Net Cash Flow from Operating Activities per Share (YoY Growth Rate %): 19.62% (internal diagnostic score: 9.76)
  • Gross Profit Margin (GPM): 37.58% (internal diagnostic score: 11.04)
  • Gross Margin Return on Assets (GMAR): 37.58% (internal diagnostic score: 11.13)
  • Net Cash Flow from Operating Activities / Total Liabilities (%): 15.23% (internal diagnostic score: 9.52)
  • Cash Flow from Operating Activities (CFOA): 4.54% (internal diagnostic score: 10.55)
  • Gross Profit on Assets (GPOA): 2.22% (internal diagnostic score: 13.02)
  • Total Assets Turnover Ratio: 21.42% (internal diagnostic score: 17.52)
  • Cost of Sales Ratio (%): 70.98% (internal diagnostic score: 5.87)
  These metrics suggest mixed fundamentals, with some positive indicators like operating cash flow growth and turnover ratio, but a high cost of sales ratio indicating pressure on profitability.

Money-Flow Trends - Big-Money and Retail Activity

The fund-flow analysis for On Semiconductor shows an overall negative trend, with big-money players and large institutional investors also showing a bearish stance. Here’s a breakdown of the flow:

• Small Inflow Ratio: 0.50 (positive trend)
• Medium Inflow Ratio: 0.50 (negative trend)
• Large Inflow Ratio: 0.49 (negative trend)
• Extra-Large Inflow Ratio: 0.45 (negative trend)
• Overall Inflow Ratio: 0.47 (negative trend)
• Block Inflow Ratio: 0.46 (negative trend)

This mix indicates that while smaller retail investors are showing some interest, institutional investors are withdrawing or are cautious. The fund-flow score of 7.4 (good) suggests a potential for positive momentum, but caution is needed due to the overall negative trend in larger money flows.

Key Technical Signals - A Strong Signal with Caution

The technical analysis for On Semiconductor shows a score of 6.23, indicating a neutral to strong bias. Here are the key indicators and their internal diagnostic scores:

• Long Lower Shadow: 6.93
• WR Oversold: 2.76
• MACD Death Cross: 5.54
• Earnings Release Date: 7.60
• RSI Oversold: 8.33

Recent technical indicators by date include:

• 2025-07-23: Long Lower Shadow, MACD Death Cross
• 2025-08-04: WR Oversold, Earnings Release Date, RSI Oversold
• 2025-08-06: WR Oversold, RSI Oversold

The key insights suggest that the stock is in a trading range with balanced bullish and bearish signals. Investors should closely monitor the market for potential breakouts or breakdowns.

Conclusion - Watch for a Pull-Back Before Entering

On Semiconductor (ON) is navigating a challenging market environment with political uncertainty and mixed analyst signals. While the technical indicators show some strength and recent positive patterns, the fundamentals are weaker, and there is no clear consensus among analysts. The fund-flow data also shows caution from institutional investors. Given these mixed signals, it may be prudent for investors to wait for a clearer trend or a potential pull-back before entering the stock. Monitoring the upcoming earnings release and any further developments in the U.S. tariff policy will also be important for assessing the stock's near-term direction.