Analyst Sees 32% Upside On This Semiconductor Stock As Long As It Remains Above $62

Analyst Sees 32% Upside On This Semiconductor Stock As Long As It Remains Above $62

President Joe Biden signed the $280 billion CHIPS and Science Act on Aug. 9, setting aside roughly $52 billion to bolster the U.S. computer chip sector.

After supply chain shortages and record demand for semiconductors, the CHIPS Act aims to strengthen supply chain resiliency and help avoid disruptions for critical components affecting every sector of the economy — and analyst Giann Di Poce sees some upside potential for a semiconductor giant.

The call: “I am bullish on ON as long as the stock remains above $62.00-$63.00,” Di Poce wrote in his weekly “Benzinga Insider Report.

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ON Semiconductor Corp ON is a U.S. semiconductor provider driving disruptive innovations with a focus on automotive and industrial end-markets to help build a better future. “The mega-corp brought in over $6.7 billion in 2021, and generated over a billion dollars in earnings,” the analyst wrote. It also has a free quarterly cash flow of $1.24 billion.

The company opened a new silicon carbide (SiC) facility in Hudson, New Hampshire on Aug. 11 which will increase the company’s SiC boule production capacity by five times year-over-year and almost quadruple the number of its employees in Hudson by the end of 2022, according to a press release.

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SiC is critical for enabling efficiency in electric vehicles (EV), EV charging, and energy infrastructure. The SiC total addressable market is projected to grow from $2 billion in 2021 to $6.5 billion in 2026, at a compound annual growth rate of 33%.

“From a technical standpoint,” Di Poce says, “ON is starting to breakout from a broadening wedge pattern, which could lead to significantly higher prices.”


Action plan: 32% return
“Upside target $94.00-$96.00,” the analyst wrote.

Other analyst calls: B. Riley Securities, Deutsche Bank, and Jeffries recently maintained their buy rating on the stock.

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