Why Aren't More People Talking About This Big News About an Nvidia Partner?

Core Viewpoint - ON Semiconductor is currently undervalued despite its strong long-term growth potential, particularly in the context of its partnership with Nvidia and the expected recovery in the automotive sector [2][3][12]. Group 1: Company Performance - ON Semiconductor's stock has declined by 28% over the past year, primarily due to challenges in the electric vehicle (EV) market, which has led to downward revisions in expectations [4]. - The company's sales to automotive-related markets are experiencing year-on-year declines, influenced by high interest rates and automakers cutting production plans [5]. - Despite the downturn, ON Semiconductor is generating value for investors and is expected to convert 25% of revenue into free cash flow (FCF) by 2025, potentially yielding about $1.44 billion in FCF [11]. Group 2: Market Outlook - There are signs of stabilization in ON Semiconductor's end markets, with sequential revenue growth noted in the latest earnings report [8]. - The partnership with Nvidia is expected to enhance the company's industrial-based sales, particularly in the context of AI infrastructure and power semiconductor supply [9]. - Analysts predict a significant earnings growth of 29% in 2026 following a challenging year in 2025, indicating a potential rebound for the stock [13].