Global Finance News
03 Nov 2026, 09:27
onsemi Rises 4% Premarket as AI Data Center Growth, Margin Expansion and Strong Q4 Outlook Boost Shares
onsemi (NASDAQ: ON) shares rose about 4% in premarket trading after the company reported stronger third-quarter 2026 revenue, expanding margins and sharply higher earnings, supported by accelerating demand from AI data centers and industrial markets.
Revenue increased 11% year over year to $1.72 billion and rose 7% sequentially. The Power Solutions Group was the strongest segment, with revenue up 21% year over year to $889.9 million.
Profitability improved significantly. GAAP gross margin rose to 41.4% from 37.9% a year earlier, while non-GAAP operating margin increased to 23.2% from 19.2%. Non-GAAP EPS climbed to $0.90 from $0.63, an increase of more than 40%, substantially outpacing revenue growth.
Cash generation was also strong. Operating cash flow increased 23% to $516 million, while free cash flow rose 31% to $489 million, equal to about 28% of revenue.
AI exposure was a major catalyst. Management said AI data center revenue increased 39% sequentially and 175% year over year. The company also agreed to acquire Ferric, which is expected to strengthen its power-delivery offering and increase its 2030 AI data center revenue target by $500 million to more than $3 billion.
For the fourth quarter, onsemi expects revenue of $1.715 billion-$1.815 billion and non-GAAP EPS of $0.95-$1.07. The midpoint implies further sequential improvement in earnings and continued margin expansion.
The 4% premarket gain appears to reflect the combination of accelerating AI data center demand, strong operating leverage, higher free cash flow and an outlook that points to continued earnings growth. The revised Synaptics acquisition structure, which management expects to be immediately accretive to non-GAAP EPS, also adds to the positive investor reaction.
onsemi (NASDAQ: ON) shares rose about 4% in premarket trading after the company reported stronger third-quarter 2026 revenue, expanding margins and sharply higher earnings, supported by accelerating demand from AI data centers and industrial markets.
Revenue increased 11% year over year to $1.72 billion and rose 7% sequentially. The Power Solutions Group was the strongest segment, with revenue up 21% year over year to $889.9 million.
Profitability improved significantly. GAAP gross margin rose to 41.4% from 37.9% a year earlier, while non-GAAP operating margin increased to 23.2% from 19.2%. Non-GAAP EPS climbed to $0.90 from $0.63, an increase of more than 40%, substantially outpacing revenue growth.
Cash generation was also strong. Operating cash flow increased 23% to $516 million, while free cash flow rose 31% to $489 million, equal to about 28% of revenue.
AI exposure was a major catalyst. Management said AI data center revenue increased 39% sequentially and 175% year over year. The company also agreed to acquire Ferric, which is expected to strengthen its power-delivery offering and increase its 2030 AI data center revenue target by $500 million to more than $3 billion.
For the fourth quarter, onsemi expects revenue of $1.715 billion-$1.815 billion and non-GAAP EPS of $0.95-$1.07. The midpoint implies further sequential improvement in earnings and continued margin expansion.
The 4% premarket gain appears to reflect the combination of accelerating AI data center demand, strong operating leverage, higher free cash flow and an outlook that points to continued earnings growth. The revised Synaptics acquisition structure, which management expects to be immediately accretive to non-GAAP EPS, also adds to the positive investor reaction.
