TL/DR –
The article discusses the bullish outlook of Wall Street on chip manufacturer Nvidia, with a consensus 12-month price target for the stock reflecting a potential upside of 44%. Meanwhile, Evercore ISI analyst Mark Lipacis predicts a greater potential growth for ON Semiconductor, another AI chip maker, with a price target increase from $68 to $80, representing a 47% increase from its current share price. However, the author expresses skepticism about the projection, citing ON Semiconductor’s Q3 revenue fall of 12% YoY and a decrease in diluted earnings per share by 32%.
“`html
A Potential Competitor to Nvidia in the AI Chip Market?
It’s no secret that Wall Street is quite optimistic about Nvidia (NVDA +3.80%), famous for its top-notch AI chips. In a survey by S&P Global (SPGI +1.16%) in December, 60 out of the 64 analysts who cover Nvidia rated the stock as a “buy” or “strong buy”.
The high demand for Nvidia’s chips has led to a year-on-year share price increase of around 30%, and the 12-month price target for the stock suggests a potential 44% upside. However, another AI company’s stock could outperform Nvidia in 2026, according to one Wall Street analyst.
Potential Future Success for ON Semiconductor?
Evercore ISI analyst Mark Lipacis raised his price target for ON Semiconductor (ON +1.60%) from $68 to $80 in November, implying a potential increase of 47% from the share price at market close on Dec. 18, 2025. Despite the stock recording a double-digit percentage decrease year-to-date in 2025, Lipacis predicted a significantly improved performance for ON Semiconductor.
However, not all Wall Street analysts share the same level of optimism. The overall average price target for the stock reflects an upside potential of only 9%. Furthermore, fewer than half of the analysts surveyed by S&P Global (15 out of 34) rated ON Semiconductor as a “buy” or “strong buy.”
ON Semiconductor’s Potential Growth Factors
Unlike Nvidia, which produces GPUs for AI servers, ON Semiconductor specializes in intelligent power and sensing technology. These products find applications in multiple areas, including data centers, electric vehicles (EVs), industrial sites, energy infrastructure, and more.
The company’s total addressable market is estimated to be $44 billion, expected to expand at a compound annual growth rate (CAGR) of around 18%. Furthermore, ON Semiconductor’s newly launched vertical gallium nitride (vGaN) power semiconductors, which can reduce energy loss by up to 50%, could help the company capture a larger market share, especially in AI data centers.
Can ON Semiconductor Really Outpace Nvidia in 2026?
While the Evercore ISI prediction seems quite optimistic, ON Semiconductor still has some challenges to overcome. For instance, the company’s Q3 revenue in the year under review fell by 12%. Additionally, the company’s diluted earnings per share also experienced a 32% decrease.
Despite the company’s projected revenue growth of 10% to 12% by 2027, U.S. EV adoption is slowing, which could impact one of the fastest-growing areas of ON Semiconductor’s market. That being said, the company’s shares trade at a reasonable forward price-to-earnings ratio of 18.5.
Overall, while Wall Street’s view of a moderate gain for ON Semiconductor in 2026 seems more plausible than Evercore ISI’s forecast of a 47% surge, both the aforementioned predictions might be overly optimistic.
“`
—
Read More US Economic News