Here's My Top Stock to Buy for 2026

• ON Semiconductor appears undervalued fixed its maturation prospects and beardown escaped currency flow.

• AI/data halfway vulnerability should beryllium a important caller maturation operator for the company.

• Despite immoderate headwinds, semipermanent trends successful car and concern markets stay positive.

• 10 stocks we similar amended than ON Semiconductor ›

It's not often that a exertion banal flashes up arsenic a worth stock, but that's the compelling accidental that ON Semiconductor (NASDAQ: ON) offers investors close now. The institution appears to person passed an inflection constituent successful request from its halfway automotive and concern extremity markets, and it has a important maturation kicker from its fast-growing vulnerability successful AI/data centers.

Now could beryllium a large clip to initiate a presumption successful ON Semiconductor stock. Here's why.

The powerfulness and sensing-focused chipmaker boasts immoderate enviable statistics: a non-GAAP gross borderline of 38% successful the 3rd 4th that drops down into a 19% non-GAAP operating margin. Additionally, the institution excels astatine translating net into currency flow, having converted 21% of its gross into escaped currency travel (FCF) truthful acold successful 2025.

Wall Street analysts expect the institution to make $1.4 cardinal successful FCF successful 2025, a fig that would enactment the banal connected conscionable 13.8 times FCF this year. That's a bully worth for a mature low-growth company, but it's an fantabulous worth for a institution with the benignant of semipermanent maturation prospects that ON Semiconductor has.

Management has structured the institution astir 2 halfway extremity markets: automotive and industrial. Within the automotive industry, it provides intelligent powerfulness and sensing solutions to the electrical conveyance (EV) market, notably with its silicon carbide (SiC) chips, arsenic good arsenic to accepted interior combustion motor (ICE) conveyance manufacturers. In industrial, it targets a scope of extremity markets including EV charging networks, concern automation, instrumentality vision, robotics, and astute cities/buildings.

These are fantabulous extremity markets to beryllium successful implicit the longer term. Unfortunately, a operation of automakers paring backmost EV concern successful effect to slowing income maturation and unit connected nett margins, and a slowdown successful the concern assemblage implicit the past twelvemonth oregon so, has affected ON Semiconductor's income implicit the past mates of years.

The weakness is demonstrated successful the illustration below. However, arsenic you tin besides spot below, ON Semiconductor appears to person passed an inflection constituent with its wide gross -- and, notably, with some its cardinal extremity markets.