ON Semiconductor CEO Addresses Market Concerns After $30 Billion TAM Reduction
Shares of ON Semiconductor (NASDAQ:ON) fell nearly 9% during its investor day event after management presented a total addressable market (TAM) for the AI data center that was $30 billion below June's projection. CEO Hassane El-Khoury explained that the earlier TAM included Synaptics, which is still pending regulatory approval and will not close until mid-2027. El-Khoury emphasized a more conservative approach to growth estimates for its AI data center segment, anchoring assumptions in industry consensus rather than proprietary projections. Despite these explanations, investors reacted negatively during the event itself, raising concerns about management's ability to deliver on expectations and maintain investor confidence. The stock has now fallen 20% from recent highs but remains up nearly 23% year-to-date. The discrepancy between forward-looking metrics like a P/E of around 17 versus an elevated trailing P/E of 47 highlights the market's skepticism about future performance.
Topics: AI data center investor day Synaptics acquisition total addressable market (TAM)