onsemi’s second quarter performance was driven by surging demand in its AI data center segment and ongoing portfolio reshaping efforts. Management pointed to robust momentum in advanced power systems, particularly for AI workloads, and highlighted content expansion in automotive and energy infrastructure. CEO Hassane El-Khoury explained that, “AI data center remains our fastest-growing market,” noting wins with key hyperscalers and design-ins with leading global customers. The company also cited operational leverage as a factor in margin expansion.
Is now the time to buy ON? Find out in our full research report (it’s free for active Edge members).
onsemi (ON) Q2 CY2026 Highlights:
- Revenue: $1.60 billion vs analyst estimates of $1.59 billion (9.2% year-on-year growth, 0.9% beat)
- Adjusted EPS: $0.74 vs analyst estimates of $0.72 (3.5% beat)
- Adjusted Operating Income: $334.1 million vs analyst estimates of $326.8 million (20.8% margin, 2.2% beat)
- Revenue Guidance for Q3 CY2026 is $1.7 billion at the midpoint, above analyst estimates of $1.67 billion
- Adjusted EPS guidance for Q3 CY2026 is $0.87 at the midpoint, above analyst estimates of $0.84
- Operating Margin: 16.1%, up from 13.2% in the same quarter last year
- Inventory Days Outstanding: 191, down from 200 in the previous quarter
- Market Capitalization: $31.6 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From onsemi’s Q2 Earnings Call
- Vivek Arya (Bank of America Securities) asked about the stability of automotive demand and the applicability of recent pricing actions. CEO Hassane El-Khoury explained that pricing increases are being applied across all markets, including automotive, to offset input cost pressures.
- Timothy Arcuri (UBS) inquired about the impact of utilization improvements on gross margin and the timing of margin benefits. CFO Thad Trent clarified that margin expansion will track utilization increases, with the full effect realized over subsequent quarters.
- Joseph Quatrochi (Wells Fargo) sought clarity on the prioritization of AI data center shipments and potential revenue impact for automotive and industrial. El-Khoury confirmed that prioritization was necessary due to constraints but expects normalization as manufacturing catches up.
- Christopher Rolland (Susquehanna) questioned the substantial increase in the company’s total addressable market (TAM) for AI data centers and electric vehicles. El-Khoury attributed the TAM increase to greater projected power and compute installation and expanded product offerings, including new technologies.
- Tore Svanberg (Stifel) asked about supply chain flexibility and the pace of content growth in next-generation data center racks. El-Khoury noted that while capacity is adequate, rapid demand increases require short-term prioritization, and the transition to 800-volt systems will drive aggressive long-term growth.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the pace of AI data center revenue growth and associated design wins, (2) tangible margin improvement from higher utilization and cost control initiatives, and (3) expansion of automotive content, particularly in China’s EV segment and new U.S. platforms. Execution on price increases and manufacturing optimization will also be closely tracked.
onsemi currently trades at $81.31, up from $80.40 just before the earnings. Is there an opportunity in the stock? The answer lies in our full research report (it’s free).
The Best Stocks for High-Quality Investors
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
