Navitas vs. ON Semiconductor: Which Power Stock is a Better Bet Now?

So far in 2025, both Navitas Semiconductor NVTS and ON Semiconductor ON have issued compelling updates in the energy-efficient power solutions space. Navitas has seen its stock soar more than 370% in the past three months, fueled by design wins and growing traction in EVs, AI data centers and renewables. Its innovations in Gallium nitride (GaN) and Silicon Carbide (SiC) are positioning the company at the heart of the electrification trend.

ON Semiconductor, meanwhile, is executing a strategy focused on fab realignment, margin expansion and global EV penetration. The company recently highlighted share gains in SiC, strong visibility in automotive and industrial recovery and rising contributions from AI and medical markets. The stock has rallied 70.8% in three months.

Share Price Comparison

For investors, both stocks present timely opportunities to tap into long-term electrification and power efficiency megatrends. Let's delve deeper.

Reasons to Be Bullish on NVTS

GaN Innovation Driving Solar and EV Adoption: Navitas has launched the industry’s first production-ready bidirectional GaN IC (BDS), which simplifies power electronics through single-stage conversion and bidirectional energy flow. This latest innovation has the potential to replace over 70% of traditional architectures, cutting size, weight, cost and power loss by 30% or more. Its applications span solar microinverters, energy storage, EV onboard chargers and motor control. Notably, the company secured its first solar design win and is seeing growing interest across sectors. Complementing this, Navitas’ automotive-qualified GaNSafe platform recently won the first-ever GaN EV onboard charger design with Changan Auto, positioning Navitas as a frontrunner in bringing GaN to mainstream electric vehicles, an important long-term growth driver.

Revenue and Path to Profitability: For the first quarter of 2025, Navitas reported 12% sequential growth and a 10% year-over-year growth in revenues, driven by traction in mobile, solar and industrial markets. While the company remains unprofitable, it significantly narrowed its non-GAAP operating loss to $10.6 million in the first quarter from $15.4 million a year ago. With improving gross margins and disciplined operating expense management, Navitas reaffirmed its outlook to achieve EBITDA breakeven in 2026, marking a path toward sustainable profitability.

Reasons to Be Bullish on ON

SiC Momentum, AI Infrastructure and Automotive Imaging: ON Semiconductor is advancing its growth through three key areas, SiC technology, AI data centers and automotive imaging. Its 4th-generation EliteSiC platform is gaining momentum in EVs and PHEVs (Plug-in Hybrid Electric Vehicles), with a major 750V platform win in the United States and expected use in about half of new EV models in China by the end of 2025.

In AI infrastructure, ON is seeing strong demand for its SiC-based UPS systems, with 40-50% revenue growth expected this year, supported by partnerships with top global suppliers and cloud providers. In automotive, ON’s 8MP image sensors are being used in ADAS (Advanced Driver Assistance Systems) systems, with shipments underway to major Chinese EV makers and new design wins with leading Asian automakers, strengthening its position in the growing market for autonomous vehicles.

Margin Expansion via Strategic Realignment: ON Semiconductor is focusing on expanding margins and driving long-term profitability through a set of operational realignments. Under its “Fab Right” initiative, the company has reduced internal fab capacity by 12%, resulting in $22 million in annual savings. Additionally, a 9% global workforce reduction and consolidation of non-manufacturing sites are expected to deliver $25 million in savings in the second quarter of 2025 alone, with an additional $5 million in quarterly savings anticipated in the second half of 2025. These actions are aligned with ON’s strategy to focus on high-value products while improving cost efficiency, supporting its long-term goal of achieving 25–30% free cash flow margins.

Comparing EPS Projections: NVTS & ON

The Zacks Consensus Estimate for Navitas’ second-quarter and 2025 earnings per share suggests 28.6% and 20.8% improvement, respectively, from the year-ago periods.

On the contrary, the Zacks Consensus Estimate for ON’s second-quarter and 2025 EPS implies a sharp decline of 43.7% and 42.7%, respectively, from the year-ago periods.

The sharp decline in ON’s EPS expectations for the second quarter and full-year 2025 indicates near-term headwinds from demand softness in parts of the industrial and computing markets, as well as the financial impact of ongoing operational restructuring, including fab closures and workforce reductions. While these actions are strategic for long-term margin expansion, they are temporarily weighing on revenue and earnings growth.

ON Attractively Valued Than NVTS

Navitas is trading at a forward 12-month price-to-sales, which is a commonly used multiple for valuing healthcare stocks, of 19.74X, reaching its 3-year high. Meanwhile, ON is presently trading at a forward 12-month price-to-sales of 4.07X, which is close to the 3-year median of 3.95X and below its 3-year high of 5.51X.

NVTS More Attractive Pick Compared to ON at Present

Navitas and ON Semiconductor carry a Zacks Rank #3 (Hold) each and are well-positioned to benefit from long-term electrification trends. However, Navitas stands out in the near term with its GaN breakthroughs, design wins, revenue growth and improving margins. While ON offers value and long-term potential, short-term earnings pressure limits its upside.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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