12:22 PM EST, 11/24/2025 (MT Newswires) -- ON Semiconductor (ON) is contending with headwinds in electric vehicles and the broader power-electronics market as impairments and revenue pressure constrain near-term earnings growth, Morgan Stanley said Monday in a report.

At the same time, the company's higher-margin analog-mixed-signal Treo platform and expanding Silicon Carbide presence in data-center power provide incremental support, the report said.

Morgan Stanley raised its earnings forecasts to $3.13 a share from $3.06 in 2025 and to $4.51 from $4.20 in 2027, noting that the company's exposure to analog-mixed-signal products and data-center applications remains attractive.

Still, a more durable recovery in demand or faster momentum in emerging opportunities will be needed to drive a sustained rerating, the report said.

Meanwhile, Semtech ( SMTC ) continues to benefit from robust data-center demand fueled by artificial-intelligence investment, with its FiberEdge transimpedance amplifier portfolio gaining traction, Morgan Stanley said.

The company reported $52.2 million in data-center revenue last quarter, which Morgan Stanley expects to rise to $55 million in the October quarter and continue higher in January. The firm also reiterated expectations that Semtech ( SMTC ) will divest portions of the Sierra Wireless business over time, a move expected to improve margins.

Morgan Stanley raised its price target on ON Semiconductor to $56 from $55 and boosted the target on Semtech ( SMTC ) to $64 from $59, maintaining equal weight ratings on both companies.

ON Semiconductor shares rose 1% in recent Monday trading, and Semtech ( SMTC ) surged 7.2%.

Price: 47.19, Change: +0.48, Percent Change: +1.04