This Week's Wolf Pick - ON Semiconductor; ON Gets 11x More Silicon Per Nvidia Rack

Every 800V rack NVIDIA ships in 2027 is worth roughly 11x more ON silicon than the 54V racks shipping today. Consensus still hasn’t put that math in its model.

The semiconductor cycle is technically still in a trough. ON Semiconductor’s (NASDAQ:ON) revenue is down 15% year-over-year, fab utilization sits around 68%, and the stock just ripped 21% in a single week and sits up 167% from its April 2025 low. Either the market has lost its mind, or it’s figuring out that the “EV recovery story” label everyone has been using for ON is the wrong label.

The setup nobody was pricing

ON makes the kind of chips that sit inside things most people never think about. Power management, sensors, voltage regulation. Historically, the bull case was electric vehicles. Every EV needs enormous amounts of silicon carbide to manage battery power, and ON built one of the largest SiC franchises in the industry. The EV slowdown over the past two years was a direct hit to that thesis, and the stock spent most of 2024 and 2025 bleeding.

Here is what changed. According to a research briefing reviewed by Wolf Financial this week, CEO Hassane El-Khoury laid out a specific framework at the Morgan Stanley TMT Conference in March. Today’s AI data center racks run at roughly 120 kilowatts of power. ON’s content inside one of those racks is approximately $9,500. The next generation of AI racks, which start shipping in the back half of 2027, will operate at close to 1 megawatt using an architecture called 800-volt direct current. ON’s content inside one of those racks jumps to approximately $105,000.

That is 11 times the silicon content, per rack, across a three-generation GPU transition.

Why 800-volt is happening

This is the part where the physics actually matters. NVIDIA’s next flagship rack system, the ...

Full story available on Benzinga.com