ON Semiconductor Stock Is Already Half Off Its High, So How Low Could A Market Shock Take It?

ON Semiconductor (ON) stock trades near $67, about 50% below its 52-week high. It lost 43.7% over the trailing three months, ending with a 9.0% fall on September 16. Yet it is still up 38.4% over the trailing twelve months, against 15.5% for the S&P 500. The company’s latest results show a business still shrinking but recovering, not one in trouble.

Why Has ON Semiconductor Stock Fallen So Far From Its High?

Its reported numbers do not explain it. The company makes power and sensing chips for cars, factories and AI data centers. Second-quarter revenue and earnings beat the midpoint of its guidance, and its third-quarter revenue forecast was above Wall Street expectations. Management now expects AI data center revenue to more than double in 2026.

What the company does report is demand arriving faster than supply. Management chose to ship to AI data centers ahead of automotive and industrial customers. Lead times stretched from about 27 weeks to around 32, and rising input costs have brought a second round of price increases. The company has also agreed to acquire Synaptics, a deal expected to close in mid-2027. Its reports do not say whether any of this drove the selling.

Is ON Semiconductor’s Business Actually Getting Worse?

Against its own recent past, the business is smaller and less profitable. Trailing twelve-month revenue is down 3.1% year over year. The operating margin of 18.0% sits below its three-year average of 23.4%.

But there are signs of a turn. Factory utilization rose to 83% from 77% in the second quarter as the company ramped production.

So the business is climbing out of a downturn, and that recovery rests on orders holding up. Growth and demand scares, a group that includes the 2020 COVID-19 Crash, have hit this stock hardest on average.

How Much Further Could ON Semiconductor Stock Fall In A Market Shock?

In 15 market shocks since 2007, ON Semiconductor fell an average of 29% peak to trough. The S&P 500 fell an average of 16% over the same windows. In growth and demand scares the stock fell 37% on average.

Its deepest fall in those shocks was 72%, in the 2008-2009 Global Financial Crisis, when the index fell 53%. The 2020 COVID-19 Crash took it down 60%. A 72% fall on a position worth 10% of a portfolio would cut about 7% from the whole portfolio, and about 14% at a 20% weight.

From the low, the stock took a median of about 4 months to reclaim its pre-shock high. The slowest recovery was recent: after the Summer-Fall 2023 Five Percent Yield Shock it took about 30 months.

So can you ride it out? The typical wait has been a few months, but the falls themselves run deep. The stock has already given back half its value from the high, so a shock now would start from a lower price, not a safer one.

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