Key Points

Vertiv delivers robust near- and medium-term access to AI infrastructure expansion.
ON Semiconductor holds stronger long-term promise in physical AI applications.
Valuation gaps highlight differing market views on each firm's outlook.
10 stocks we like better than ON Semiconductor ›

AI data center infrastructure firm Vertiv (NYSE: VRT) and power and sensing chip specialist ON Semiconductor (NASDAQ: ON) give investors varied paths into the AI infrastructure space. Vertiv clearly supplies more immediate and focused exposure to the AI theme, yet ON Semiconductor appears positioned for greater extended gains.

Understanding AI infrastructure

Hyperscalers are pouring vast sums into AI infrastructure, though the shifting pattern of that spending over time receives less attention. It breaks down into two overlapping stages.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »

The initial stage centers on building AI systems, training large language models, and running inference to support autonomous agents.

The follow-on stage shifts models beyond the cloud into physical AI, with inference happening at the edge in robots or electric vehicles rather than centralized facilities.

Vertiv and ON Semiconductor

Over the longer horizon, spending in the second stage should surpass the first after the early surge and continue expanding. This frames how Vertiv and ON Semiconductor align. Both collaborate with Nvidia on AI data center tech, yet their profiles differ sharply.

Company	First Phase (AI infrastructure build-out)	Second Phase (Physical AI Infrastructure)
Vertiv	Strong position via power, cooling, and data center design expertise	Cloud inference exposure, yet only indirect ties to physical AI advances
ON Semiconductor	Smaller but rapidly expanding data center segment	Deep reach into physical AI via power and sensing lines, plus the planned $7 billion Synaptics deal for edge capabilities

Data source: Author's analysis.

The investment case for Vertiv and ON Semiconductor

Vertiv stands as a direct beneficiary of the build-out phase with added indirect benefits from later physical AI growth, since expanded edge systems will still require broader digital support. Its role in Nvidia-led data center designs positions it well for sustained relevance.

Buyers of Vertiv stock seek reliable medium-term expansion and further lifts from higher hyperscaler budgets, which has fueled its gains this year.

By comparison, ON Semiconductor's data center revenue is projected at roughly $500 million out of nearly $6.5 billion total in 2026. Its core focus remains power and sensing chips for EVs and industrial uses such as charging, renewables, and automation.

Image source: Getty Images.

Even so, its data center segment should double in 2026, while its intelligent power, sensing, and control offerings align it closely with physical AI. It also partners with Nvidia on advanced high-power facilities. Management recently addressed a gap in its physical AI lineup by pursuing the $7 billion Synaptics purchase to add connected compute.

This setup allows ON Semiconductor to supply sensors, power management, motion control, and now edge AI processing for devices like industrial robots, enabling full real-time operation.

Valuation matters

The contrast shows up in valuations, with investors paying a premium for Vertiv's nearer-term AI role over ON Semiconductor's longer-range prospects.

Visible Alpha consensus estimates for price-to-free-cash-flow illustrate the spread.

Data source: Visible Alpha. *Does not include Synaptics.

Which stock to buy?

Choose Vertiv if you anticipate further AI budget increases, as it stands to gain directly. Yet the valuation may warrant caution if you see limited room for additional upside.

ON Semiconductor trades at a clear discount, though ownership requires accepting sizable EV and industrial exposure alongside smaller near-term AI contributions and confidence in the Synaptics integration. The latter path looks more attractive, given the clear trajectory toward physical AI in areas like autonomous driving and robotics.

Should you buy stock in ON Semiconductor right now?

Before you buy stock in ON Semiconductor, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and ON Semiconductor wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $390,394!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,209,184!*

Now, it’s worth noting Stock Advisor’s total average return is 899% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.

See the 10 stocks »

*Stock Advisor returns as of July 29, 2026.

Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Vertiv. The Motley Fool recommends ON Semiconductor and Synaptics. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.