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Onsemi Is Near a Breakout—And Free Cash Flow Could Fuel It
Author: Thomas Hughes. Article Posted: 2/11/2026.
Article Highlights
- Onsemi’s Q4 2025 results and guidance signaled a return to growth, with improving margins and rising free cash flow supporting continued buybacks.
- Management and analysts expect growth to accelerate through 2026, with margins improving as end markets stabilize and data center strength continues.
- The stock’s technical setup looks constructive, but heavy institutional ownership can amplify volatility around key resistance levels.
ON Semiconductor (NASDAQ: ON), which operates under the Onsemi brand, saw mixed stock price action following its Q4 2025 earnings report and guidance update, but the initial sell-off proved to be a head fake. While results and guidance disappointed some relative to consensus forecasts, they confirmed the company's return to growth, an expectation for margin improvement, stronger free cash flow, and continued capital return to shareholders.
Free cash flow is a major factor: Onsemi's balance sheet is a fortress, allowing the company to allocate 100% of free cash flow to buybacks. Investors can reasonably expect that a return to revenue growth, wider margins and faster earnings growth will accelerate buyback activity and provide a meaningful tailwind for ON shares.
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Discover how to invest in the fund Trump uses to collect this income >>In 2025 Onsemi set a company record for free cash flow margin, positioning it for accelerated earnings growth once revenue recovers. Buybacks in 2025 reduced the share count by more than 6.3%, and a strong pace is expected to continue in 2026. During the quarter the board authorized an additional $6 billion in buybacks — more than 20% of market cap as of mid-February — likely to be deployed over the next three years.
Onsemi Is on Track for a Business Inflection This Year
Onsemi's Q4 results were mixed: revenue missed MarketBeat's consensus by a narrow margin while earnings beat. The top-line decline of about 11.6% was largely expected. More important were margin trends, signs of stabilization in end markets, strength in data center demand, and management's 2026 outlook. Segment-wise, the Intelligent Sensing Group led with 9% year-over-year growth, while Power Solutions and Analog & Mixed Signal contracted.
Margins were better than feared. Although revenue deleveraging caused some margin compression, margin quality improved more than anticipated, leaving adjusted EPS at $0.64 — $0.02 ahead of forecasts. Management guided to modest single-digit revenue growth in fiscal Q1 that should accelerate through the year alongside margin improvement. Executives expect Q1 earnings to rise roughly 11%, while analysts forecast growth accelerating into the ~20% range in Q2 and ~30% in Q3.
Analysts' Sentiment Firms; Onsemi's Support Base Strengthens
Analysts' sentiment is mixed: several price-target cuts were offset by upgrades and increases following the guidance update. The stock carries a consensus Hold rating from 28 analysts, and post-release revisions remain broadly consistent with that view.
The consensus target is just above $67, implying ON is roughly fairly valued near a key resistance level. The question is whether analysts will grow more bullish over the coming quarters — the likely answer is yes. Onsemi isn't yet posting robust growth, but it is growing and appears to be at the start of a cyclical upswing in high-performance intelligent semiconductor products for industrial applications (see analysis).
Institutional ownership is both a support and a risk. Institutions own more than 97% of the stock and can strongly influence price action. They were net sellers in 2025, applying downward pressure, but returned to buying in early 2026, which provided support; however, they could resume distribution as the share price advances.
Onsemi Stock Price Action Amid Reversal
ON's stock has been rebuilding its support base for more than a year and now appears poised for a reversal. In early 2026 the stock is approaching a critical resistance level that aligns with 2024 support (breached in early 2025). Technical signs are bullish and suggest a breakout could be imminent, but several congestion zones could create volatility and trigger corrections near $80 and $90 as the move unfolds.
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