ON Semiconductor dropped 11% on Tuesday to close at $117.06 — and the options market flagged the trouble before most investors knew to look.
The clearest signal this week came from options positioning, which shifted abruptly from one of the calmest readings of the year to one of the most defensive. The put/call ratio jumped to 0.82 on June 23, nearly double its 20-day average of 0.45 and almost four standard deviations above that mean — the highest z-score in at least a year. The prior session's reading was 0.36, the 52-week low. That whipsaw from the most bullish options print of the year to the most defensive in a single day captures the speed and severity of the market's sentiment reversal.
The lending market, by contrast, tells a quieter story. Short interest runs at 7.3% of free float — meaningful, but it has been easing steadily. The short book contracted roughly 13% over the past three weeks, falling from around 33.8 million shares to 29.6 million. Availability is exceptionally loose at 1,491% — meaning there are roughly 15 shares available to borrow for every one already out on loan — and has actually expanded this week. Cost to borrow is negligible at 0.40%, easing 7% over the past week. Short sellers are not pressing new bets here; the squeeze risk is minimal and the borrow market shows no urgency on either side.
Street opinion is divided but has been moving in one direction. Analysts have raised targets across the board in recent weeks. Wells Fargo went to $140 Overweight, Mizuho to $150 Outperform, and BofA lifted its Buy target to $138. Those moves came before Tuesday's selloff. This morning, Stifel raised its target from $90 to $107 while keeping a Hold — that post-drop revision now sits just below the current price of $117. Citigroup's $120 Neutral target, set on June 15, now essentially marks the market. The consensus sits at Hold across 18 analysts with a mean target of $107, implying the average analyst actually sees modest downside from here at current levels. Forward EPS momentum is exceptional — the 12-month forward EPS estimate ranks in the 97th percentile year-on-year — but the analyst recommendation divergence score comes in at just the 8th percentile, capturing how few bulls are willing to commit relative to the quality of the earnings trajectory. The EV/EBITDA multiple has compressed roughly 3% over the past month to around 20x, and the P/E of 33x has held broadly steady.
The bull case rests on EV and data-center exposure, a dominant position in China's electric vehicle supply chain, and a potential $300 million benefit from non-core business exits. Bears point to margin pressure, inventory normalization in automotive and industrial end markets, and a competitive landscape that has already weighed on peers — MCHP fell 9% on the day and 7% on the week, ADI dropped 8.6%, and TXN shed 8.4%, suggesting Tuesday's move was partly sector-driven rather than idiosyncratic to ON. JP Morgan Asset Management notably added 6.7 million shares in its most recent reporting period, a significant vote of confidence from a major active holder that contrasts with the cautious consensus.
On the insider side, CFO Trent Thad sold 90,000 shares across three tranches in April at prices between $80 and $100 — before the stock's run into the $120s. That selling, in retrospect, came at relatively low prices versus current levels, and no insider activity has been filed since May. The 90-day net insider figure is a modest positive at roughly 97,000 shares, though that net is dominated by small equity-plan transactions rather than open-market conviction buys.
The next earnings event is August 3. The past two prints produced muted one-day moves — a 0.35% decline and a 5.2% decline — with both recovering to gains within five days. The question heading into August is whether Tuesday's one-day shock has fully repriced the stock for the inventory and margin concerns bears have been raising, or whether the options market's abrupt defensive turn reflects something the earnings release will need to resolve.
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