ON vs STM: Which Is the Better Buy in 2026?

Same yardstick, side by side (as of August 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.

The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. ON and STM share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.

This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined ON and STM exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.

onsemi (ON Semiconductor) is a US-based semiconductor company focused on intelligent power and sensing technologies. Its power products, including silicon and silicon-carbide devices, manage and convert electricity in electric vehicles, industrial equipment, and power supplies, while its sensing products, such as image sensors, are used in automotive cameras and industrial vision. The company has deliberately concentrated on automotive and industrial markets, where semiconductor content per vehicle and per machine is rising, and it has been repositioning its manufacturing and product mix toward higher-margin, differentiated products rather than commodity chips.

Full ON guide

STMicroelectronics designs and manufactures a broad range of semiconductors, including analog chips, power and discrete devices (notably silicon carbide, where it holds the largest global share at roughly a third of the market), microcontrollers, MEMS sensors, and RF products. Its customers are concentrated in automotive (electrification, ADAS, body and safety electronics) and industrial (factory automation, power conversion, energy), with a more cyclical consumer and personal-electronics business layered on top. Unlike fabless designers, ST owns its fabs, which makes it capital-intensive and highly sensitive to factory utilization, a dynamic that has weighed heavily on margins during the recent downturn.

Full STM guide

Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.

• ON drivers: AI data-center power opportunity; Rising semiconductor content in vehicles.
• STM drivers: Silicon carbide and automotive electrification; Cyclical recovery off the trough.

A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: The dominant risk is cyclicality: onsemi's automotive and industrial end markets rise and fall with the economy, vehicle production, and factory investment, so revenue and earnings can swing sharply and a soft patch can pressure results even amid long-run content growth. For STM, sTM is deeply cyclical and capital-intensive, so weak factory utilization can compress margins sharply, as it did in 2025 when operating margin fell near breakeven.

Growth-minded investors who believe the theme has years to run tend to accept the richer multiple for more upside; value-minded investors lean toward the cheaper forward earnings and steadier profile. Pick ON if you believe its drivers more; STM if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the ON and STM guides.

ON. Figures are approximate and tied to the asOf date; verify live numbers before acting. For a cyclical semiconductor company, earnings multiples can look high near a cyclical trough (when profits are depressed) and low near a peak, so it helps to consider where automotive and industrial demand sit in the cycle rather than a single P/E. The AI data-center growth adds a faster-moving element to what has been a more cyclical, content-driven story.

STM. STM's valuation looks expensive on forward earnings largely because profits are depressed at the bottom of the cycle, not because the business is structurally rich. Revenue troughed near $3.1 billion in Q1 2026 with gross margin around 33.8%, well below the 44 to 46% level management targets in its longer-term model. The multiple therefore embeds an expectation that margins and earnings recover meaningfully over the next couple of years.

Headline figures (approximate, Jul 2026): ON shows revenue (q1 2026) ~$1.51 billion, above the midpoint of guidance, gaap gross margin ~38.5% in Q1 2026, non-gaap diluted eps ~$0.64 in Q1 2026, ai data-center growth up more than 30% sequentially; expected to roughly double year over year in 2026; STM shows revenue (ttm) ~$12B, fy2025 revenue ~$11.8B (down ~11%), q1 2026 revenue ~$3.1B (up ~23% YoY), q1 2026 gross margin ~33.8%.

ON and STM are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined ON and STM exposure against your real portfolio. It is not an investment adviser.