ON Semiconductor Corp. (ON): Investor Day highlights 2030 financial targets, growth in power products, and the outlook for automotive

We attended onsemi's Investor Day in New York. We see the stock reaction (down 9%) as overdone in light of elevated expectations heading into the event. We view the company's 2030 financial targets (slightly ahead of the Street) as very solid, although they may have fallen slightly short of the most bullish expectations. Importantly, we believe the company laid out a strong case for why it is well positioned to benefit from secular growth trends in power semis tied to both AI datacenters and physical AI. In addition, we are encouraged by the company's plans to return 100% of FCF to shareholders while maintaining low capital intensity. Onsemi laid out its 2026-30 model for a revenue CAGR of 12%-14%, reaching ~$11bn by 2030, with targets of 53% gross margin, ~38% operating margin, and free cash flow of more than $3.5bn in 2030;