On Semiconductor (ON) shares are inching higher today after Bank of America Securities issued a constructive note on the intelligent power and sensing company.
In a research note dated April 13, analyst Vivek Arya upgraded ON stock to “Buy” and increased his price target to $85, indicating potential upside of an exciting 21% from current levels.
His bullish call is significant given On Semiconductor stock has already rallied about 25% in April.
Why Did BofA Upgrade On Semiconductor Stock?
BofA’s upgrade is rooted in On Semiconductor’s evolving product mix and disciplined financial management.
Arya highlighted the firm’s expanding pipeline in AI power solutions and its new Treo platform as primary growth engines, which could drive its EBIT margins to 30% within the next three years.
Moreover, the analyst pointed to On Semiconductor’s aggressive $6 billion buyback commitment as a major catalyst for shareholder value.
With a current free cash flow yield of about 6%, Arya dubbed ON shares current valuation as super attractive compared to its semiconductor peers.
Why Else Are ON Shares Worth Owning in 2026?
Arya cited “low balance sheet leverage (dry powder for potential mergers and acquisitions)” as another major reason to own On Semiconductor shares in his research report.
According to Arya, ON is strongly positioned for the transition to Silicon Carbide (SiC) technology. As the world’s second-largest power chipmaker, it’s a critical supplier for the automotive sector’s shift toward high-efficiency electric vehicles (EVs) and autonomous driving.
In 2026, the company is also benefiting from a catch-up trade; after underperforming the broader SOX index due to past Tesla (TSLA)-related volatility, On Semiconductor has now pruned its portfolio to focus on high-margin industrial and AI applications.
With an upcoming analyst day in September expected to showcase new artificial intelligence power innovations, the stock remains a top pick for investors seeking exposure to the electrification of the global economy.
Wall Street Remains Bullish on On Semiconductor
Other Wall Street analysts also remain positive on On Semiconductor for the remainder of 2026.
The consensus “Moderate Buy” rating on ON stock signals it can rip higher even though its relative strength index (14-day) is already hovering near the overbought territory.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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