NVIDIA Corporation (NVDA) vs ON Semiconductor Corporation (ON): Which Is the Better Buy in 2026?
As of 2026-06-19, NVDA is overvalued at $211, with a DCF intrinsic value of $163 and a margin of safety of -29%. ON is undervalued at $122, with an intrinsic value of $337 and a margin of safety of 64%. Of the two, ON has the wider margin of safety.
Rewards
- ★NVIDIA Corporation has maintained ROIC above 10% for 4 consecutive years, suggesting solid business economics.
- ★Gross margin of 74.1% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Free cash flow has grown at a 193.9% CAGR over the past 4 years, demonstrating strong earnings power growth.
- ★PEG ratio of 0.39 suggests the stock is undervalued relative to its growth rate — paying less than 1x for each unit of earnings growth.
- ★Altman Z-Score of 4.70 indicates very low bankruptcy risk — the company is firmly in the safe zone.
Risks
- ⚠FCF yield of 1.9% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
- ⚠Beneish M-Score of -1.06 flags financial patterns consistent with potential earnings manipulation — warrants further investigation.
- ⚠39 insider sales with no purchases over the past 12 months — a persistent pattern of insider selling.
- ⚠ROIC has declined by 17.0 percentage points over the past 4 years, which may signal competitive erosion.
- ⚠FCF yield of 2.7% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
- ⚠Trailing P/E of 89.4x is 53% above the historical average of 58.6x — the stock trades at a premium to its own history.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →What growth rate is the market pricing in at $211?
The market implies +17.9% Owner Earnings growth, below historical trends — potential opportunity.
Standard FCF implies a more demanding +20.8%, reflecting heavy growth investment expected to generate future returns.
What growth rate is the market pricing in at $122?
The market implies +30.4% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +16.3%, reflecting heavy growth investment.
Economic Moat Score
Learn more →Narrow moat with roic consistency as the key competitive advantage. Improving revenue predictability would strengthen the moat.
Narrow moat with roic consistency as the key competitive advantage. Improving margin stability would strengthen the moat.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is pricing this stock without strong emotion in either direction"
"Market is pricing this stock without strong emotion in either direction"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: NVDA vs ON
Is NVIDIA Corporation or ON Semiconductor Corporation more undervalued in 2026?▼
Based on our discounted cash flow model, ON trades at a 63.9% margin of safety (intrinsic value $337 vs. price $122), compared to NVDA's -29.0% margin of safety (intrinsic $163 vs. $211).
Which stock has a wider economic moat, NVIDIA Corporation or ON Semiconductor Corporation?▼
NVDA scores 69/100 (Narrow moat), while ON scores 41/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Which company has better free cash flow, NVIDIA Corporation or ON Semiconductor Corporation?▼
ON Semiconductor Corporation (ON) generates a 2.7% free cash flow yield, compared to NVIDIA Corporation's 1.9%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.
Which stock has higher return on invested capital, NVIDIA Corporation or ON Semiconductor Corporation?▼
NVDA earns 63.1% ROIC versus ON's 8.3%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.
Does NVIDIA Corporation have accounting red flags?▼
NVDA's Beneish M-Score of -1.1 flags it as a likely earnings manipulator (above the -1.78 threshold). By contrast, ON scores -3.0, within the normal range. The Beneish model detects aggressive accounting through eight financial ratios.