Broadcom vs. ON Semiconductor: Which Stock Is Better in 2026?

According to a report from Motley Fool, chip investors have two different paths into the next semiconductor cycle with Broadcom (AVGO) and ON Semiconductor (ON). The question is which stock offers a better setup as AI spending, industrial demand, and valuation come into play.

Recommendation Change

The report does not cite a specific analyst recommendation but provides a general comparison. Broadcom is known for its focus on data centers, networking, and AI, while ON Semiconductor targets industrial and automotive markets.

Analyst Rationale

The report notes that Broadcom benefits from strong demand for custom AI chips (ASICs) and networking products, driving rapid growth. In contrast, ON Semiconductor faces challenges from sluggish industrial demand but could benefit from a recovery in automotive and industrial sectors as the economic cycle improves.

Context

Broadcom's stock performed strongly in 2025, supported by AI spending, while ON Semiconductor struggled with weak industrial demand. Valuations differ, with Broadcom trading at higher earnings multiples compared to ON Semiconductor, which appears cheaper.

What We Conclude

The comparison presents two options: Broadcom for fast AI-driven growth and ON Semiconductor for cyclical recovery at a lower valuation. Investors should assess their risk tolerance and investment horizon before choosing.