This Nvidia Partner Was My Top Pick for 2026, and It's Up 43%: Here's Why It's Still a Great Value Now
2026-10-11 11:15
•Lee Samaha •The Motley Fool
••••••• ••• Axe Cap view
Why ON Semiconductor’s Rally Still Has Room to Run
ON Semiconductor’s ties to AI and electric vehicles keep it a solid growth bet despite a 43% jump this year.
ON Semiconductor has been on quite a run—up 43% in 2026—but the story isn’t over yet. Its deepening partnership with Nvidia on advanced power solutions puts it at the heart of the AI data center boom, where demand for efficient chips is only accelerating. Plus, the upcoming Synaptics acquisition could give ON’s AI edge computing capabilities a serious upgrade. For South African investors, the direct JSE pick is slim, but the USD/ZAR rate reflects global tech appetite and foreign capital flows. A stronger dollar tends to pressure the rand, impacting local sectors like resources and banks indirectly exposed to foreign earnings. The semiconductor cycle could keep USD strength intact if US rates stay higher for longer, which means rand weakness might persist. That’s a concern for domestic stocks but an opportunity for offshore exposure to tech plays like ON. This view could be wrong if inflation drops faster than expected and the Fed cools off soon, reducing AI-related spending and supporting a weaker dollar. this is just our opinion and not financial advice
I’d watch ON Semiconductor as a buy for offshore exposure to AI and EV trends while keeping an eye on USD/ZAR dynamics. Locally, protect capital by trimming cyclical rand-sensitive stocks until currency volatility eases.
- ON Semiconductor
- USD/ZAR
- US inflation falls faster, hurting AI investment
- Rand strengthens, reducing offshore earnings impact
6/10
ON Semiconductor, despite a 43% gain in 2026, remains a strong value play due to its exposure to electric vehicles, industrial applications, and fast-growing AI data center infrastructure. Management projects 12-14% revenue CAGR and 30% operating income CAGR through 2030, with the pending Synaptics acquisition expected to strengthen its position in the physical AI market.
Our take is based on reporting first published by The Motley Fool.