ON Semiconductor Moves To Acquire Allegro, Sparking Investor Interest

Allegro Microsystems Inc ALGM stock gained Monday amid reports indicating takeover interest from ON Semiconductor ON, Bloomberg reported on Sunday, citing people familiar with the matter.

ON Semiconductor has been working with advisers recently to pursue Allegro, Bloomberg reported, citing unnamed sources.

Reportedly, semiconductor companies looking to beef up their automotive capabilities could consider buying Allegro.

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Last week, Allegro tapped Mike Doogue as its CEO, succeeding Vineet Nargolwala.

Needham’s N. Quinn Bolton named Allegro his top pick for 2025, saying he expects broad-based, analog/mixed-signal and that cyclical recovery stocks may outperform in 2025. The analyst expects the performance of AI and non-AI stocks to begin to see some mean reversion as growth in AI revenue begins to decelerate and fundamentals for analog/mixed-signal semiconductor companies start to recover.

Bolton also remains positive about ON Semiconductor being highly leveraged to a cyclical recovery and expects the company to see the name perform well in the second half of the calendar for 2025.

Recently, ON Semiconductor began laying off ~2,400 of its employees across all business divisions in 2025.

ON Semiconductor expects first-quarter adjusted revenue of $1.35 billion-$1.45 billion, below the consensus of $1.69 billion.

The company expects adjusted EPS of $0.45–$0.55 below the consensus of $0.89.

Price Action: ALGM stock is up 19.3% at $26.56 at last check Monday. ON is up 0.06%.

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