ON Semiconductor (ON) — Q2 2026 Earnings Preview

1. Earnings Preview

Key Takeaway: The setup into Q2 2026 is constructive — consensus sits at a beatable bar with revenue consensus of ~$1.589B at the midpoint of guidance, and the biggest swing factor is whether AI data center revenue continues to dramatically outpace internal expectations as it did in Q1 (+30% QoQ vs. ~15% expected).

Heading into Q2 2026, the bar for ON appears achievable: consensus revenue of ~$1.589B sits near the midpoint of management's guided range of $1.535B–$1.635B, and non-GAAP EPS consensus of ~$0.71 is near the midpoint of the $0.65–$0.77 guided range, leaving room for a beat if AI data center momentum continues to surprise to the upside. Management's tone on the Q1 call was the most confident in several quarters — explicitly declaring the cycle low is behind them, flagging that H2 is expected to outgrow H1, and upgrading the full-year AI data center outlook to doubling year-over-year — a posture that has not materially shifted since. Estimate revisions since the Q1 print have been modestly positive, with FY2026 revenue consensus edging up to ~$6.49B from ~$6.48B post-print, tracking in line with guidance rather than diverging. The stock, however, has given back all of its post-earnings gains and then some, falling ~20% from the May 4 close to ~$81.61 as of August 3, driven primarily by the June 25 Synaptics acquisition announcement (all-stock, ~$7B enterprise value) which introduced dilution concerns and strategic uncertainty — meaning the stock is no longer pricing in a beat, and a clean quarter could catalyze a re-rating. The single biggest wildcard is the Synaptics deal overhang: investors will scrutinize whether management can articulate a clear integration roadmap and financial impact, and any softness in AI data center growth relative to the elevated expectations set on the Q1 call would compound the negative sentiment.

2. KPIs & Consensus Expectations

Key Takeaway: Consensus sits near the midpoint of guidance on both revenue and EPS, making this a low bar relative to ON’s recent beat cadence; AI data center revenue trajectory is the bigger swing factor — if it again dramatically exceeds internal expectations, gross margin and EPS could surprise meaningfully to the upside.

Table 1 — Q2 2026 Current Quarter Snapshot (All Key KPIs)

Source: Visible Alpha consensus and actuals data. Q2 2026 guidance from Q1 2026 earnings call (May 4, 2026). Non-GAAP gross margin % implied from gross profit consensus divided by revenue consensus. SiC revenue consensus as of post-Q1 baseline.

Table 2 — Beat/Miss History (Last 8 Quarters, Top 2 KPIs)

Revenue

Non-GAAP EPS (Diluted — Operating)

Source: Visible Alpha consensus and actuals data. Note: Q4 2024 and Q4 2025 represent the only two misses in the last 8 quarters; ON has beaten revenue consensus in 5 of the last 7 reported quarters and EPS in 6 of 7, establishing a consistent beat cadence that sets a higher implicit bar for the market.

3. Guidance & Commentary Evolution

Key Takeaway: Guidance has been reiterated, not revised — on June 25, 2026, onsemi explicitly reaffirmed its Q2 2026 financial outlook alongside the Synaptics acquisition announcement; management tone remains confident on H2 outgrowing H1, though the Synaptics deal introduces a new variable around capital allocation and dilution.

4. Guidance vs. Estimate Revision Tracker

Key Takeaway: Estimates have been broadly stable to modestly higher since the Q1 print, tracking in line with guidance rather than diverging — the lack of meaningful upward revision despite strong Q1 results and upgraded AI data center outlook suggests the street is being appropriately cautious, leaving room for a positive surprise if execution continues.

Source: Visible Alpha consensus and actuals data. Post-Q1 baseline as of May 9, 2026 (5 trading days after May 4, 2026 earnings). The near-zero estimate revisions across all KPIs since the Q1 print suggest the street has largely absorbed the upgraded AI data center outlook into the FY2026 numbers without extrapolating further — a conservative stance that leaves upside optionality if Q2 AI data center growth again exceeds internal expectations. The notable exception is FCF, where the current consensus is meaningfully above the post-print baseline, likely reflecting improved confidence in the margin expansion trajectory.

5. Stock Performance

Key Takeaway: The stock is down ~20% since the Q1 earnings date (May 4: $102.04 → Aug 3: $81.61), driven almost entirely by the Synaptics acquisition announcement on June 25 (stock fell from $118.74 to $90.65 the next day, a ~24% single-day drop) — the selloff reflects dilution concerns and strategic uncertainty, not fundamental deterioration, meaning the stock is no longer pricing in a beat and a clean Q2 print could catalyze recovery.

ON (onsemi) Indexed Stock Price Since Q1 2026 Earnings (May 4, 2026 = 100). Key events marked: Convertible Notes Offering ($1.5B, May 7) and Synaptics Acquisition Announcement (June 25). Source: Stock Price Data.

Stock Performance Summary (May 4 – August 3, 2026):

• May 4 close (Q1 earnings day): $102.04
• Peak post-earnings: $133.93 (June 3, 2026) — +31.3% from earnings date, driven by AI data center enthusiasm and convertible notes offering
• June 25 close (day before Synaptics announcement): $118.74
• June 26 close (day of Synaptics announcement): $90.65 — a single-day decline of ~$28 / ~24%
• August 3 close: $81.61 — down ~20% from the Q1 earnings date, down ~39% from the June 3 peak
• The stock has underperformed the semiconductor sector materially since the Synaptics announcement; the deal overhang is the dominant driver of relative underperformance

6. Material News & Developments

Key Takeaway: The dominant development since Q1 earnings is the all-stock acquisition of Synaptics (~$7B EV, announced June 25) — a transformative strategic pivot toward Physical AI and edge compute that has reset the investment thesis and is the primary overhang heading into Q2 results.

• June 25, 2026 — onsemi to Acquire Synaptics in All-Stock Merger (~$7B EV): onsemi announced a definitive agreement to acquire Synaptics (SYNA) in an all-stock transaction at a fixed exchange ratio of 1.350 ON shares per SYNA share, representing a ~19% premium to the 10-day VWAP. Synaptics shareholders will own ~12% of the combined company. The deal is expected to close in mid-2027, subject to regulatory and SYNA shareholder approvals. Strategic rationale: adds Synaptics’ Edge AI compute platform (Astra), wireless connectivity (Wi-Fi, Bluetooth, GPS), and HMI portfolio to onsemi’s power and sensing capabilities, positioning the combined company at the intersection of Power, Sense, Connected Compute, and Control for Physical AI applications. Management projects $200M in annual synergies, EPS accretion within 18 months of close, and a $30B TAM expansion to $243B by 2030. Implication: The all-stock structure introduces ~12% dilution; the deal is a significant strategic pivot that will dominate Q2 earnings call discussion and investor scrutiny.
• May 11, 2026 — onsemi Completes $1.5B Convertible Notes Offering (0%, due 2031): onsemi priced and closed a $1.5B aggregate principal amount of 0% Convertible Senior Notes due 2031 (including full exercise of the overallotment option). Initial conversion price ~$161.30/share. Concurrently, the company repurchased ~3.1M shares for ~$331.9M using proceeds. Convertible note hedges were entered to reduce dilution; warrants sold at a $211.54 strike (100% premium to the May 6 close of $105.77). Implication: Raised significant capital at zero cost; the concurrent buyback was shareholder-friendly, but the convertible structure adds complexity to the capital structure ahead of the Synaptics deal.
• July 16, 2026 — onsemi Announces Q2 2026 Results Date: onsemi issued a press release confirming it will announce Q2 2026 financial results (date not yet specified in the release). Implication: Confirms the upcoming earnings event; investors will be focused on Q2 results and the first post-Synaptics-announcement management commentary.
• May 18, 2026 — Shareholders Approve Simple Majority Voting, Elect Directors: onsemi shareholders approved simple majority voting and elected directors at the Annual Meeting. Implication: Governance improvement; routine corporate action.
• May 4, 2026 — Q1 2026 Earnings Beat; AI Data Center Outlook Upgraded: Revenue of $1,513.3M (+1.7% vs. consensus), non-GAAP EPS of $0.64 (+3.9% vs. consensus), non-GAAP gross margin of 38.5% (third consecutive quarter of expansion). AI data center revenue grew >30% QoQ, nearly double the expected rate. Full-year 2026 AI data center revenue outlook upgraded to doubling year-over-year. Automotive posted first YoY growth after 7 consecutive quarters of decline. Q2 2026 guidance midpoints above consensus at the time. Implication: Established a high bar for AI data center execution; the stock initially rallied but gave back gains as the Synaptics deal was announced.

7. Peer Commentaries — Q2 2026 Read-Throughs

Key Takeaway: Peer commentary from Q2 2026 earnings calls (reported in late July 2026) and conference appearances (May–June 2026) is uniformly bullish on the same end markets ON is exposed to — AI data center demand is accelerating across the board, automotive is inflecting positively, industrial is recovering broadly, and supply is tightening with lead times extending — all of which are positive read-throughs for ON’s Q2 print.

Note: Only peer commentary from the last 60 days (since ~June 2, 2026) that speaks to current quarter (Q2 2026) or forward-looking dynamics is included below. Prior-quarter earnings calls discussing prior-quarter results are excluded.

NXP Semiconductors (NXPI) — Q2 2026 Earnings Call (July 28, 2026)

Read-Through Signal: Strongly Positive

• Automotive inflecting sharply: NXPI reported automotive revenue of $1.94B, up 12% YoY (17% adjusted for MEMs sensor divestiture), driven by software-defined vehicle content growth. Q3 guidance calls for automotive up mid-single-digit % sequentially and high-teens % YoY (adjusted). Critically, NXPI stated it has not seen restocking in automotive — growth is purely content-driven, not inventory replenishment. This is a direct positive read-through for ON’s automotive segment, which management guided roughly flat QoQ in Q2 but with content growth as the primary driver.
• AI data center accelerating: NXPI quantified its data center revenue at ~$200M in 2025 and expects to exceed $500M in 2026 — a 2.5x increase. NXPI’s position is in the control plane (top-of-rack switches, rack management processors), complementary to ON’s power tree position. The broad-based hyperscaler demand signal from NXPI validates ON’s AI data center growth narrative.
• Industrial up 38% YoY: NXPI’s industrial IoT revenue grew 38% YoY in Q2 and is guided up high-30s% YoY in Q3. This is a strong positive read-through for ON’s industrial segment, which consensus expects up ~8% QoQ in Q2.
• Book-to-bill well above 1 across all end markets: NXPI reported a book-to-bill close to 2 overall, significantly above 2 in communication equipment and data center. This signals strong forward demand and supply tightening — consistent with ON’s own commentary about lead times extending and some technologies going on allocation.

Monolithic Power Systems (MPWR) — Q2 2026 Earnings Call (July 30, 2026)

Read-Through Signal: Positive (AI Data Center & Automotive)

• Record revenue driven by AI data center: MPWR reported record quarterly revenue of $981M, up 22% QoQ and 48% YoY. Enterprise data (AI data center) grew 45% sequentially on broad-based ordering patterns. MPWR’s data center exposure is approaching ~50% of its business. This is a strong positive read-through for ON’s AI data center segment, which is expected to continue its >30% QoQ growth trajectory.
• 800V data center architecture sampling: MPWR began sampling high-voltage AC-to-DC products for 800V data center architectures — directly validating ON’s strategic thesis around the 800V rack content opportunity and vertical GaN technology. Both companies are competing for the same high-voltage power conversion sockets.
• Automotive H2 ramp on track: MPWR confirmed automotive H1 was flat and H2 is ramping, with mid-teens YoY growth expected for the full year. The ramp is broad-based across ADAS, zonal 48V systems, battery management, and LiDAR — consistent with ON’s automotive content growth narrative.
• No inventory build; channel inventory very low: MPWR confirmed no inventory building and very low channel inventory, indicating strong sell-through. This is consistent with ON’s lean inventory positioning and supports the view that demand is real, not pull-forward.

STMicroelectronics (STM) — Q2 2026 Earnings Call (July 23, 2026)

Read-Through Signal: Positive (AI Data Center, SiC, Industrial); Mixed (Automotive High-Voltage)

• AI data center revenue ambition raised: STM raised its data center revenue ambition to above $1B in 2026 and well above $2B in 2027, driven by optical connectivity (silicon photonics), microcontrollers, and power solutions. Book-to-bill significantly above 2 in communication equipment and data center. Q4 2026 data center revenue expected to grow ~90% YoY. This is a strong positive read-through for ON’s AI data center positioning.
• SiC back to growth: STM reported SiC revenue grew low-teens % YoY and mid-30s% QoQ in Q2, with book-to-bill well above 1 and a growing backlog. STM confirmed double-digit SiC revenue growth for full-year 2026. This is a direct positive read-through for ON’s SiC segment, which consensus expects at ~$212M in Q2 (roughly flat QoQ from Q1’s $214M).
• Industrial up 34% YoY; distribution inventory below target: STM’s industrial revenue grew 34% YoY and 20% QoQ in Q2, with distribution inventory now below standard target. Industrial expected to grow close to 40% YoY in Q4. This validates ON’s industrial recovery narrative and supports the consensus expectation of mid-single-digit % QoQ growth in ON’s industrial segment.
• Automotive high-voltage headwind — a cautionary note: STM flagged that its high-voltage power semiconductor business for EV powertrains (about 7% of automotive revenue) is experiencing unacceptable profitability due to intense competition and overcapacity, requiring a fundamental realignment. This is a potential negative read-through for ON’s SiC/high-voltage automotive business, though ON has been more explicit about its differentiated device performance and China market share (~55% at Beijing Auto Show) as insulation from this dynamic.
• H2 above seasonal; Q4 above $4B: STM guided Q3 revenue of $3.7B (+6.2% QoQ, +16.2% YoY) and Q4 above $4B, with H2 vs. H1 growth above normal 15% seasonality. This broad-based recovery signal is consistent with ON’s H2 > H1 guidance.

Texas Instruments (TXN) — Q2 2026 Earnings Call (July 22, 2026)

Read-Through Signal: Positive (Industrial, Automotive, AI Data Center)

• Broad-based demand acceleration: TXN reported Q2 revenue of $5.5B, up 13% QoQ and 23% YoY, with industrial up ~30% YoY, data center doubling YoY and up ~20% QoQ, and automotive up mid-teens YoY. Q3 guidance of $5.65B–$6.15B implies continued broad-based growth. This is a strong positive macro read-through for ON’s end market exposure.
• Automotive inventory at very low levels; cycle just starting: TXN management stated automotive customers have taken inventory to very low levels and the demand increase is creating an unsustainable situation, driving restocking. TXN believes “we are in the start of a very broad cycle” in automotive. This is a strong positive read-through for ON’s automotive segment and validates the inventory replenishment thesis.
• Industrial customers not yet building inventory: TXN noted industrial customers are early in the recovery and not yet building inventory, suggesting current demand is for supporting ramps rather than restocking. This is consistent with ON’s view that it is shipping to natural demand and that the recovery has further to run.
• 800V data center architecture as a TAM expansion: TXN management explicitly discussed the 800V data center architecture transition as a TAM expansion opportunity, with more conversion stages benefiting analog and embedded content. TXN also highlighted GaN as the key technology for 800V-to-12V conversion — directly validating ON’s vertical GaN investment thesis.
• Lead times extending; pricing increases beginning: TXN noted lead times are seeing a slight uptick and the company has started executing price increases (customer-by-customer, beginning to flow through in Q3). This is consistent with ON’s April 1 price increase and the expectation that pricing tailwinds will flow through in H2 2026.

Infineon Technologies (IFNNY) — Q2 FY2026 Earnings Call (May 6, 2026)

Read-Through Signal: Positive (AI Power, SiC, Industrial Recovery); Mixed (Automotive High-Voltage)

• AI power supply in allocation; $1.5B FY2026 / $2.5B FY2027 revenue targets confirmed: Infineon confirmed its AI data center power supply revenue forecast of €1.5B for FY2026 and €2.5B for FY2027, despite a weaker USD. Critically, Infineon stated its AI-related business is currently in allocation — directly validating ON’s commentary that some technologies are on allocation and lead times are extending. GaN ramp for AI data centers is underway.
• SiC benefiting from AI data center demand: Infineon noted that demand for SiC solutions from AI-related applications is very strong, with its SiC business expected to grow low-double-digit % in FY2026. This is a positive read-through for ON’s SiC segment, which is seeing demand from both EV and AI data center applications.
• Order backlog up €4B QoQ to ~€25B (+25% YoY): Infineon’s order backlog grew significantly, with customer orders being confirmed well into the next fiscal year. This is a strong positive read-through for ON’s improving backlog visibility and lead time extension commentary.
• Automotive high-voltage headwind — same cautionary note as STM: Infineon flagged that its high-voltage power semiconductor business for EV powertrains is experiencing unacceptable profitability due to intense competition and overcapacity, requiring restructuring. This is the same dynamic STM flagged and represents a potential risk for ON’s SiC automotive business, though ON has been more explicit about its differentiated positioning.
• Industrial recovery broadening; inventory at low levels: Infineon’s Green Industrial Power segment grew 15% QoQ, driven by energy infrastructure, HVAC, and home appliances. Distribution inventory is reaching low levels, causing order intake to pick up significantly. This validates ON’s industrial recovery narrative.

Microchip Technology (MCHP) — Q4 FY2026 Earnings Call (May 7, 2026) & Conference Appearances (May–June 2026)

Read-Through Signal: Positive (Broad Recovery, Lead Times, Restocking)

• Distribution inventory correction complete; restocking beginning: MCHP stated the distribution inventory correction is complete, with distribution inventory now below normal levels. The company expects distribution restocking in the near term. April 2026 was the largest booking month in almost 4 years. This is a strong positive read-through for ON’s lean inventory positioning and the broader restocking cycle thesis.
• Lead times broadly expanding; supply constraints spreading: MCHP noted lead times are broadly expanding and substrate constraints are spreading across data center, connectivity, networking, and automotive businesses. The company expects that in another quarter, there could be nothing available in 4–6 weeks. This validates ON’s commentary about lead times extending from 23 weeks (Q4 2025) to 26 weeks (Q1 2026) and some technologies going on allocation.
• Q2 2026 (June quarter) guidance: up 11% QoQ: MCHP guided its June quarter (equivalent to ON’s Q2 2026) up 11% sequentially, with strong growth expected from data center, A&D, industrial, and automotive. This broad-based sequential growth signal is consistent with ON’s above-seasonal Q2 guidance (excluding noncore exits, revenue expected up ~7% at the midpoint).
• Innovation-driven cycle replacing inventory cycle: MCHP CEO Steve Sanghi noted that engineers who substituted parts during the post-COVID era have returned to designing new products, with new designs going into production across industrial, automation, A&D, automotive, and data center. This structural demand driver is consistent with ON’s content growth narrative in automotive (Treo platform, 10BASE-T1S Ethernet) and AI data center.

Peer Read-Through Summary Table

Key Takeaway from Peer Read-Throughs: The peer commentary is overwhelmingly positive for ON’s Q2 2026 setup. AI data center demand is accelerating across all power semiconductor peers, automotive is inflecting with content growth as the primary driver (not restocking), industrial is recovering broadly with distribution inventory below normal levels, and supply is tightening with lead times extending and some products going on allocation. The one cautionary note — flagged by both STM and Infineon — is the high-voltage power semiconductor headwind in automotive EV powertrains due to Chinese overcapacity; ON has been more explicit about its differentiated SiC device performance and ~55% China EV market share as insulation from this dynamic, but it remains a risk to monitor.

8. Insider Transaction Activity

Key Takeaway: No open-market buys or discretionary sells by executives since the Q1 earnings date; all Form 4 activity consists of routine director equity awards (code A) and a single tax-withholding share disposition by a Group President — nothing notable or concerning.

Source: SEC Form 4 filings (Insider Transaction Data). Open-market buys (Code P) and open-market sells (Code S): None filed since May 4, 2026. All transactions are either routine director equity awards (Code A — grants, not purchases) or a tax-withholding share disposition (Code F) by a Group President on a vesting event. The absence of any discretionary open-market selling by executives — including during the period when the stock was trading above $130 in early June — is a mild positive signal. No 10b5-1 plan initiations or terminations were filed in the period.