The Power Behind AI — A Beaten-Down Chip Leader With a Bold New Roadmap

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Everyone talks about the AI chips. Almost nobody talks about the power that runs them — and AI data centers are now bumping into real electricity limits. The unglamorous companies that make AI racks more power-efficient are quietly becoming essential infrastructure. Today's pick is one of them: a beaten-down power-semiconductor leader that just laid out an ambitious plan to ride the AI-power wave — and it's trading ~44% below its high with ~37% analyst upside. Quality franchise, fresh catalyst, real catch. Let's dig in. 👇

OpenAI and Anthropic could be two of the biggest AI IPOs Wall Street has seen in years.

But investors don’t have to wait for those names to hit the public markets to get exposure to the AI boom.

MarketBeat’s 7 AI Stocks to Buy Now report reveals 7 publicly traded companies already positioned to benefit as the next wave of AI investment moves beyond the private model providers.

These are the stocks investors can buy today, before the IPO crowd rushes in.

See the 7 stocks

Wall Street is constructive but split on timing. The consensus is a "Buy"/"Moderate Buy," with an average 12-month target around $104–$107 (range roughly $85–$150) — implying ~37% upside from the ~$76 price.

One honest note: after Q2, several desks (Mizuho, BofA, Wells Fargo, Stifel) trimmed near-term targets as the auto/industrial downturn dragged on — but they kept their ratings, and the average still sits ~37% above the price. The long-term story stayed intact; the debate is purely about when the cycle turns. This week's Analyst Day (below) just handed the bulls fresh ammunition.

ON Semiconductor (branded onsemi) makes the "intelligent power and sensing" silicon that manages electricity and vision across cars, factories, and now AI servers. Its moat is a shift away from commodity chips toward proprietary, high-margin platforms sold on multi-year supply agreements. Three segments:

The through-line: as GPUs devour more power per rack, data centers must upgrade to higher-voltage, more-efficient power stages — exactly onsemi's specialty. Its differentiated vertical GaN and new Embedded Power Platform (EPP) are its ticket into that build-out (Subaru is already evaluating EPP for EVs).

At its Financial Analyst Day (Sept 16), onsemi laid out an ambitious long-term plan that reframes the whole story:

That's a genuinely compelling long-term picture — and it's why analysts keep ~37% upside targets despite the near-term softness. The caveat: these are 2030 targets, and they assume both an auto recovery and an AI ramp big enough to fill the fabs. Ambitious, not guaranteed.

onsemi's Q2 2026 (Aug 3) was a double-beat: revenue of ~$1.604B, non-GAAP EPS of $0.74 (ahead of estimates), a gross margin recovering to 39.3%, and strong free cash flow — with EPS growing ~4x faster than revenue, the hallmark of operating leverage as utilization recovers. Management guided Q3 higher sequentially with margins expanding toward the low-40s%.

The bigger strategic move: onsemi struck a ~$7 billion deal to acquire Synaptics ("physical AI"/edge compute). Be honest that it's controversial — the stock had its worst day since 2020 when it was announced, on concerns about price and integration — though it has since cleared the FTC, and management projects >55% gross margins and $200M+ of synergies from it. A bold bet that's not yet proven.

Positioning matters: onsemi bounced hard off its cyclical low (52-week range $44.56–$134.92) and has recovered into the mid-$70s on a broad semiconductor rebound — but it's still below both its 50-day (~$82) and 200-day (~$87) moving averages, so this is a recovery that hasn't yet confirmed a new uptrend.

onsemi is a genuine, high-quality power-semiconductor leader at a cyclical low — trading ~44% below its high with ~37% upside to consensus, a recovering margin profile, real operating leverage, and a freshly unveiled 2030 roadmap that plants a serious flag in the fast-growing AI-power market. For investors who want exposure to the "picks-and-shovels of AI power" (and EV electrification) at a discounted, out-of-favor price, this is a legitimately interesting setup — and the Analyst Day gives the bull case a concrete, multi-year spine.

But own it clear-eyed. This is a cyclical, and the recovery is still in its early innings — the market is currently pricing the downside, trailing earnings are depressed, and the dazzling AI figures are a 2030 aspiration that requires both an auto rebound and a data-center ramp to materialize. The bull case: buy a best-in-class franchise at the trough, ahead of a cycle turn and an AI-power inflection. The bear case: the cycle stays soft, the 2030 targets slip, and a ~46x trailing multiple has room to compress. The decider is the cycle turn — watch auto/industrial demand and the AI data-center ramp. A compelling turnaround-with-a-catalyst for patient investors — just size for the volatility and don't pay up for the 2030 story before the 2026 numbers confirm it.

What we're watching next: auto/industrial inventory normalization, the AI data-center revenue ramp, gross-margin recovery toward the 40s, the Synaptics close, and Q3 results (Nov 2).

Trade smart, size your risk, and we'll see you tomorrow. ⚡