Onsemi in talks to buy chip startup Ferric for ~$1B - report (ON:NASDAQ)

onsemi (ON) shares rose 5.6% after announcing a revised agreement to acquire Synaptics, valued at $5.7B, down from $7B. The deal now offers cash instead of stock, reducing dilution concerns and expected to be immediately accretive to non-GAAP EPS, according to the company.

ON Semiconductor (ON) reports Q3 earnings on Nov 2, with analysts expecting $1.70B revenue and $0.88 EPS. The company's AI data center business is growing rapidly, and it plans to acquire Synaptics (SYNA) for $5.7B in cash. Management guided Q3 revenue to $1.65B-$1.75B and EPS to $0.81-$0.93. Gross margin and AI data center mix will be key factors in the quarter's performance.

U.S. stocks closed mixed on Tuesday, with the Dow Jones rising 529.85 points, boosted by 3M's 5.82% gain after strong Q3 results and a deal with Amazon. 3M reported $6.6B in sales and raised its full-year EPS guidance. GM fell 6.84% despite beating expectations, citing narrowed full-year EBIT guidance. Health care and small caps outperformed, while tech stocks were mixed. SpaceX reported strong Q3 results, beating expectations.

US chip stocks rebounded Monday after last week's selloff, with the iShares Semiconductor ETF up 3.6%. Intel rose 4.2% after a 14% drop, while Nvidia, AMD, and others also gained. J.P. Morgan upgraded Intel to 'neutral'. The Philadelphia chip index fell 11.4% last week, its biggest drop since March 2025, but is still up 57.2% year-to-date.

onsemi (ON) plans to release Q3FY26 earnings on November 2, 2026. The company amended its merger agreement with Synaptics (SYNA), reducing the acquisition value to $5.7B ($123 per share in cash). The revised deal is expected to be immediately accretive to onsemi's non-GAAP EPS and includes additional synergies. The transaction is expected to close by mid-2027, subject to regulatory approvals and Synaptics shareholder approval.

StoneX initiated coverage of ON Semiconductor (ON) with a Buy rating and a $110 price target, citing strong demand in automotive and AI data center markets. The stock is trading at $73.36, 17.7% above its GF Value™ of $62.35, indicating modest overvaluation. ON has a GF Score™ of 86/100, reflecting solid financial health and growth prospects.