Should I buy ON Semiconductor stock in 2025? Expert Analysis for South African Investors

What is ON Semiconductor?

How much is the ON Semiconductor stock?

The price of ON Semiconductor stock is rising this week. Currently, the ON share is trading at $42.94, showing a daily gain of $0.10 (+0.22%) and an impressive 10.50% increase over the past week. Its market capitalisation stands at $17.94 billion, with an average three-month trading volume of 10.22 million shares. The price-to-earnings (P/E) ratio is 29.82, and ON Semiconductor does not pay a dividend, resulting in a dividend yield of 0%. With a beta of 1.39, this stock tends to be more volatile than the overall market—something South African investors may want to consider when evaluating the potential rewards and risks.

Our full analysis on the ON Semiconductor stock

Having thoroughly reviewed ON Semiconductor Corporation’s latest quarterly and annual results, alongside its share performance trajectory over the last three years, we combined a rigorous approach—leveraging an array of financial metrics, technical signals, comparative sector data and competitor benchmarks, synthesised through our proprietary analysis engine. As a midcap leader at the confluence of high-growth electrification and industrial automation, ON Semiconductor’s positioning is attracting renewed market attention. So, why might ON Semiconductor stock once again become a strategic entry point into the global smart power technology sector in 2025?

Recent Performance and Market Context

Over the past twelve months, ON Semiconductor’s share price corrected firmly, currently trading at $42.94, down -39.5% year-on-year and -31.9% year-to-date, according to the latest market data (30 May 2025). However, the stock surged +10.5% in the past week alone, strongly outpacing peers and indicating a rebound from recent lows. This swift positive turn has been attributed to improving sentiment around the cyclical bottom in industrial and automotive chip demand.

The broader semiconductor sector returned to growth in 2024, with industry projections showing a 19% year-on-year expansion. Notably, global appetite for advanced automotive electrification chips and industrial automation semiconductors—ON’s specialties—continues to accelerate amid record investments in renewables, digital infrastructure, and next-generation transportation. This macroeconomic tailwind, together with ON Semiconductor’s leading market share positions, seems poised to underpin a new phase of outperformance.

Technical Analysis

Recent technical signals for ON Semiconductor are notably constructive:

• Relative Strength Index (RSI 14 days): At 53.31, the RSI is neutral but trending upward—suggesting ongoing accumulation, not overbought territory.
• MACD (12,26): A positive MACD reading (+0.93) confirms a bullish inflection point, typically a precursor to further upward momentum.
• Short- and Medium-Term Moving Averages:
• MA 20 days at $42.21 and MA 50 days at $40.23 both signal a short-term buy, with the price having established a base above key averages.
• While longer-term MAs (100-day at $45.96, 200-day at $58.09) still point to caution, these lagging indicators provide a setup for potential trend reversals as the stock approaches critical resistance levels.
• Support and Resistance Structure:
• Immediate support: $40.91 (Fibonacci retracement)
• Major support: $31.04 (52-week low)
• Immediate resistance: $45.12
• Long-term resistance: $80.08 (52-week high)

Technical sentiment remains moderately bullish, with 10 buy, 5 neutral, and 7 sell signals on proprietary screens. Notably, high recent volumes paired with a breakout above short-term averages suggest that ON may be entering an attractive new bullish phase.

Fundamental Analysis

Despite industry headwinds, ON Semiconductor continues to demonstrate core financial strengths that underpin its investment case:

• Solid Free Cash Flow: In 2024, FCF reached $1.21 billion—a threefold increase year-on-year. Over half (54%) of this was returned to shareholders via buybacks, directly enhancing value per share.
• Resilient Profitability: Fourth-quarter margins remained robust, with GAAP gross margin at 45.2% and operating margin at 23.7%. These levels reflect superior operational efficiency, even as top-line sales declined.
• Growth Potential: While FY24 revenue contracted (-14% YoY to $7.08 billion) amid cyclical weakness, ON’s underlying exposure to structural megatrends—including EVs, industrial automation, and power management—remains a powerful earnings driver. The Intelligent Sensing Group (ISG), for example, saw only a marginal decline (-2%), underscoring the stickiness of key verticals.
• Attractive Valuation: At a forward P/E of 29.8 and Price/Sales of 2.76, ON trades at a notable discount to premium names in the smart-power and sensing segment, positioning it attractively for re-rating as sectoral demand normalizes.
• Market Share and Differentiation: ON Semiconductor is the recognized leader in automotive/industrial power chips, with a differentiated product portfolio spanning silicon carbide solutions, intelligent power modules, and advanced sensors—a moat hard to replicate for most competitors.

Volume and Liquidity

A 3-month average daily volume of over 10.2 million shares and a market cap of $17.94 billion reflect deep liquidity and the high institutional conviction in ON Semiconductor’s story. With a free float of approximately 91.6%, the stock is accessible to both global and local (e.g., JSE all-share listed ETFs) investors, while ensuring valuation remains responsive to market dynamics. High trading volumes on recent upswings lend further credibility to the notion that informed capital is positioning for a cyclical recovery.

Catalysts and Positive Outlook

Looking ahead, several imminent and structural drivers are poised to catalyze further upside for ON Semiconductor:

• Next-Gen Product Launches: ON’s leadership in silicon carbide (SiC) power modules and high-sensitivity imaging sensors for EVs directly aligns with trillion-dollar mega-investments in electric transport and autonomous vehicles.
• Strategic Expansions: Ongoing capacity ramp-up in North American and Asian fabs, as well as new partnerships in cloud infrastructure and 5G, establish ON at the heart of long-cycle growth markets.
• Sustainability/ESG Initiatives: Sustainability-driven procurement—especially in the EMEA and APAC regions—increasingly favours ON’s portfolio of high-efficiency, low-carbon footprint chips.
• Sector Tailwinds: Industry-wide inventory normalization and strong end-market demand for energy conversion, fast charging, and smart power solutions foreseeably support a return to top-line growth through late 2025.
• Upcoming Catalysts: Results due between 28 July and 1 August 2025 may mark a clear turning point, with management guiding to stabilized Q1 revenue ($1.35–$1.45 billion) and healthy gross margins (39–41%)—both of which are likely to beat lowered base expectations if order trends continue rebounding.

Investment Strategies

ON Semiconductor’s technical and fundamental profile presents several compelling avenues for portfolio inclusion:

• Short-term Positioning: The current rebound above MA 20/50, coupled with a MACD cross and rising volumes, suggests a technically opportune moment for nimble entries aiming for a re-test of $45.12 resistance.
• Medium-term Outlook: As cyclical headwinds abate, consensus forecasts a +9% price appreciation towards $47, with upside risk to $65 if sector sentiment pivots and ON’s product pipeline achieves commercial wins.
• Long-term Perspective: Investors focused on the energy transition, mobility, and automation megatrends may find ON’s market leadership, robust FCF and proven capital returns a strong basis for multiyear conviction. Entry around current levels ($40–$43) appears especially attractive in historical context—well off 52-week highs and near structural support zones.

Ideal strategy recommends phased accumulation at or near current technical supports, with optional additions should Q1 results and sector flows accelerate the recovery. Risk remains moderate-to-high in the short term, but prospective rewards are clearly leveraged to any reacceleration in industrial and automotive end-markets.

Is It the Right Time to Buy ON Semiconductor?

Synthesising the quantitative and qualitative evidence, ON Semiconductor stands out as a smart-power and sensing solutions leader entering a technically and fundamentally attractive window. Despite a challenging 2024, the company has preserved margins, amped up shareholder returns, and maintained critical market share. The sector is poised for strong cyclical and structural growth, supported by automotive electrification, automation, and energy infrastructure upgrade megatrends. Recent price action, attractive valuation metrics, and robust liquidity further underscore the opportunity to consider a strategic entry.

With a bullish medium-term analyst consensus and clear early signs of momentum reversal, ON Semiconductor seems to represent an excellent opportunity to gain exposure to the next wave of technology-driven industrial transformation. For investors seeking resilient growth and leadership at the heart of the global energy and mobility revolution, ON’s combination of strong fundamentals and positive technical signals justifies renewed interest at these levels.

ON Semiconductor offers investors a unique window into tomorrow’s smart-tech economy—a window that appears wide open as the sector rotation and end-market recovery gather pace.

How to buy ON Semiconductor stock in ZA?

Buying ON Semiconductor (ON) shares online is straightforward and secure for investors in South Africa, thanks to the many regulated brokers offering access to US equities. You can choose between two main approaches: spot buying (owning the shares outright for long-term investment) or trading Contracts for Difference (CFDs) for flexible, leveraged strategies. Each option has its own advantages, and both are easily accessible online with just a few clicks. To help you find the most suitable and cost-effective platform, a detailed broker comparison is provided further down this page.

Spot Buying

With spot (cash) buying, you purchase actual ON Semiconductor shares, becoming a part-owner of the company. This method is ideal for investors who wish to hold shares over the long term and directly benefit from any price appreciation. Typical fees for South African investors include a fixed commission per transaction (usually around R100-R200) and may also involve a small currency conversion charge, since trading is in US dollars.

Example

If ON Semiconductor is trading at $42.94 per share, a $1,000 investment (about R18,500, depending on the exchange rate) would let you buy approximately 23 shares (23 x $42.94 = $987.62), after accounting for a typical $5 (approx. R92) brokerage fee.

Gain scenario: If ON Semiconductor’s share price rises by 10% to $47.23, your shares would be valued at $1,100.
Result: +$100 gross gain, or +10% on your investment, before deducting final fees or currency fluctuations.

Trading via CFD

CFD trading on ON Semiconductor shares allows you to speculate on price moves without actually owning the shares. This is suitable for those seeking flexibility, including the option to take advantage of both rising and falling prices. CFDs enable leveraged trading – meaning, with a smaller upfront amount, you gain exposure to a larger position. Be aware, though, of fees: you’ll pay the spread (the difference between buy and sell price), and overnight financing charges for positions held overnight.

Example

With $1,000 in your trading account, you open a CFD position on ON Semiconductor using 5x leverage. This means your market exposure is $5,000.

Gain scenario: If the share price rises by 8%, your position gains 8% x 5 = 40%.
Result: +$400 on a $1,000 stake (excluding spread and daily financing fees).

Final Advice

Before you start investing in ON Semiconductor, take the time to carefully compare brokers’ fees, trading conditions, and platform features—they can have a real impact on your returns, especially for international shares. Your choice between spot buying and CFD trading should depend on your risk tolerance, investment horizon, and financial goals. For a clearer overview of available options for South Africans, see the broker comparison table further down this page.

Our 7 tips for buying ON Semiconductor stock

The latest news about ON Semiconductor

ON Semiconductor records a 10.5% stock price increase over the past week, signaling renewed investor optimism. This recent performance highlights a noticeable recovery in ON’s share price, reversing some of the sharp declines seen earlier in 2024 and outperforming broader semiconductor sector trends during the same period. Professional market participants cite strong technical momentum, with the stock trading near its short-term moving averages, an encouraging sign that could attract further buying interest. For South African (ZA) analysts and institutional investors with exposure to technology indices or global semiconductor baskets, ON’s weekly surge demonstrates resilience and reinforces the importance of closely monitoring entry points in volatile global tech sectors.

Analyst consensus has shifted towards a moderate buy, pointing to a 9% upside potential from current prices. The average analyst price target now stands at $46.76, with a median of $47.00, reflecting increased confidence in ON’s medium-term prospects. Thirty-four analysts are active on the stock, adding breadth to the consensus view and reducing the risk of outlier-driven recommendations. This outlook is particularly relevant for South African asset managers benchmarking against global tech peers, as it affirms ON’s standing in international portfolios and signals a degree of sector stabilization which may inform allocation decisions.

ON Semiconductor maintains leading positions in automotive electrification and industrial automation, sectors with strong relevance for South African industry. The company's strategic focus on power and intelligent sensing solutions positions it to benefit from global shifts towards electric vehicles (EVs) and the modernization of industrial processes—both fields gathering momentum in southern Africa, driven by electrification initiatives and policy support for green energy. South African investors with interests in automotive value chains, local EV assembly projects, or industrial automation platforms may view ON’s sector dominance as a proxy for global best practice and technology transfer potential in the domestic context.

ON's robust financial discipline is evident as it triples free cash flow in 2024 and returns 54% to shareholders through buybacks. Despite a 14% revenue contraction over the past year, ON’s sharp improvement in cash generation and disciplined return-of-capital policy underscore management’s ability to navigate cyclical downturns. This financial resilience is vital for African pension funds and sovereign wealth funds that prioritize capital preservation and shareholder alignment, offering them confidence in the company’s management through turbulent markets.

Sector tailwinds—19% projected global semiconductor growth and rising 5G/cloud demand—support ON’s long-term narrative. With the international semiconductor industry expected to expand by double digits this year, ON is well-placed to capitalize on surging global demand, particularly as it expands its offerings in strategic areas like 5G infrastructure and cloud computing. For ZA-based observers, this context not only situates ON as a key global growth participant but also links directly to regional digital transformation agendas and investment in telecommunications and data centers, mapping potential downstream impacts for South Africa’s technology landscape.

FAQ

P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.