Investing.com -- B. Riley downgraded ON Semiconductor (NASDAQ:ON) to “Neutral” from “Buy” and cut its price target to $41 from $73 saying there is a reduced visibility into a sustained revenue recovery and trimming estimates on weaker auto and industrial demand.

The brokerage said it now expects lower second-half 2025 and 2026 sales across the Auto & Industrial sub-sector, which makes up roughly 80% of ON’s business.

It flagged non-strategic exits and a subdued second half of this fiscal revenue profile as drivers of the revised outlook.

While we like management’s higher value strategic focus and numerous cost reductions, we believe timing to the next sustained revenue inflection is unclear and perhaps distant, B. Riley wrote.

Shares of ON Semi have already fallen 36% year-to-date through the first quarter and are down 16% so far in the second quarter, underperforming the SOX index.

Despite the steep drop, B. Riley sees just 10% upside to its revised price target, prompting the downgrade to the sidelines.

Despite this, B. Riley sees only 10% upside to its revised price target, prompting the downgrade.

B. Riley also lowered price targets across the broader A&I chip group, including Microchip (NASDAQ:MCHP), Rogers and indie Semiconductor, citing a challenging macro environment and tariff-related uncertainty.

Initial signs of recovery flagged by Texas Instruments (NASDAQ:TXN) could be driven more by inventory restocking than a sustained rebound, leaving the broader chip group exposed to potential second-half disappointments.

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