Goldman Sachs Semiconductor Stocks: Top 5 Picks

1. ON Semiconductor Corporation (NASDAQ:ON)

Number of Hedge Fund Holders: 39

Goldman Sachs’ Stake Value: $2,345,738,000

ON Semiconductor Corporation (NASDAQ:ON) is an Arizona-based company that provides intelligent sensing and power solutions worldwide. It is one of the premier Goldman Sachs semiconductor stocks to monitor. The firm owns 20.3 million shares of ON Semiconductor Corporation (NASDAQ:ON) worth $2.3 billion as of Q2 2022, representing 0.53% of the total portfolio. 

On November 1, Mizuho analyst Vijay Rakesh maintained a Buy rating on ON Semiconductor Corporation (NASDAQ:ON) but lowered the firm’s price target on the shares to $72 from $79 following the Q3 results. The analyst sees ON Semiconductor Corporation (NASDAQ:ON) as well positioned with SiC capacity continuing to increase, but noted that the short-term gross margin outlook, weak macro environment into 2023, and potential industry pricing are a concern for investors.

Among the hedge funds tracked by Insider Monkey, 39 funds were long ON Semiconductor Corporation (NASDAQ:ON) at the end of June 2022, compared to 48 funds in the prior quarter. Jeffrey Smith’s Starboard Value LP is the largest stakeholder of the company, with 5.6 million shares worth $282.6 million. 

Here is what Artisan Partners specifically said about ON Semiconductor Corporation (NASDAQ:ON) in its Q2 2022 investor letter:

“ON Semiconductor Corporation (NASDAQ:ON) is a global market leader in power management and image sensors. The company reported 49% gross margins in 1Q22 which met the new management team’s 48%-50% long-term target after revising it higher just one quarter ago. We believe ON has a clear path to >50% gross margins, and its financial results reflect the ongoing structural improvements in both manufacturing and products, cost initiatives, product mix and rising prices. Growing demand for chips in electric vehicles, renewable energy infrastructure, advanced driver assistance (multiple cameras), factory automation and machine vision should drive sustainable high single-digit top-line growth. With shares trading at an attractive discount to our PMV estimate, we continued to move this holding up the Crop of the portfolio.”

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