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Onto Innovation (ONTO - Free Report) ended the recent trading session at $295.25, demonstrating a -1.27% change from the preceding day's closing price. The stock trailed the S&P 500, which registered a daily loss of 0.14%. Elsewhere, the Dow lost 0.01%, while the tech-heavy Nasdaq lost 0.57%.

The maker of semiconductor manufacturing equipment's stock has dropped by 5.33% in the past month, falling short of the Computer and Technology sector's loss of 4.82% and the S&P 500's gain of 0.25%.

The investment community will be closely monitoring the performance of Onto Innovation in its forthcoming earnings report. The company is scheduled to release its earnings on August 6, 2026. In that report, analysts expect Onto Innovation to post earnings of $1.68 per share. This would mark year-over-year growth of 34.4%. In the meantime, our current consensus estimate forecasts the revenue to be $325.6 million, indicating a 28.39% growth compared to the corresponding quarter of the prior year.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $7.14 per share and a revenue of $1.33 billion, signifying shifts of +44.53% and +32.56%, respectively, from the last year.

Any recent changes to analyst estimates for Onto Innovation should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. At present, Onto Innovation boasts a Zacks Rank of #1 (Strong Buy).

With respect to valuation, Onto Innovation is currently being traded at a Forward P/E ratio of 41.9. This expresses no noticeable deviation compared to the average Forward P/E of 41.9 of its industry.

It is also worth noting that ONTO currently has a PEG ratio of 1.22. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Nanotechnology was holding an average PEG ratio of 1.22 at yesterday's closing price.

The Nanotechnology industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 1, which puts it in the top 1% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

Posted by Defense World Staff on Jul 21st, 2026

Bank of New York Mellon Corp reduced its holdings in Onto Innovation Inc. (NYSE:ONTO – Free Report) by 5.5% in the 1st quarter, according to the company in its most recent filing with the SEC. The firm owned 567,805 shares of the semiconductor company’s stock after selling 32,988 shares during the quarter. Bank of New York Mellon Corp owned approximately 1.14% of Onto Innovation worth $116,440,000 as of its most recent SEC filing.

Several other large investors have also recently modified their holdings of the business. Eagle Rock Investment Company LLC raised its holdings in shares of Onto Innovation by 99.3% during the fourth quarter. Eagle Rock Investment Company LLC now owns 10,037 shares of the semiconductor company’s stock valued at $1,584,000 after purchasing an additional 5,000 shares during the period. CWM LLC grew its stake in shares of Onto Innovation by 361.2% in the 4th quarter. CWM LLC now owns 20,068 shares of the semiconductor company’s stock valued at $3,168,000 after buying an additional 15,717 shares during the period. M&T Bank Corp grew its stake in shares of Onto Innovation by 11,228.9% in the 4th quarter. M&T Bank Corp now owns 341,112 shares of the semiconductor company’s stock valued at $53,848,000 after buying an additional 338,101 shares during the period. Fideuram Asset Management Ireland dac bought a new stake in Onto Innovation in the 4th quarter valued at about $1,583,000. Finally, Allspring Global Investments Holdings LLC increased its position in Onto Innovation by 148.8% in the 4th quarter. Allspring Global Investments Holdings LLC now owns 271,610 shares of the semiconductor company’s stock valued at $45,052,000 after buying an additional 162,433 shares in the last quarter. Institutional investors own 98.35% of the company’s stock.

Wall Street Analyst Weigh In ONTO has been the topic of several recent research reports. Evercore reiterated an “outperform” rating and issued a $315.00 price target on shares of Onto Innovation in a report on Friday, April 17th. Jefferies Financial Group restated a “buy” rating and set a $350.00 price objective on shares of Onto Innovation in a report on Wednesday, May 6th. Weiss Ratings raised Onto Innovation from a “hold (c-)” rating to a “hold (c)” rating in a research report on Monday, April 27th. Cantor Fitzgerald increased their target price on Onto Innovation from $350.00 to $410.00 and gave the stock an “overweight” rating in a report on Monday, June 29th. Finally, Freedom Capital raised shares of Onto Innovation to a “strong-buy” rating in a research report on Wednesday, June 17th. Two research analysts have rated the stock with a Strong Buy rating, ten have issued a Buy rating and one has assigned a Hold rating to the stock. According to data from MarketBeat.com, the company has a consensus rating of “Buy” and an average price target of $339.60.

Get Our Latest Stock Analysis on ONTO

Onto Innovation Stock Down 0.5% Shares of NYSE:ONTO opened at $278.45 on Tuesday. The business’s 50 day moving average is $295.27 and its 200 day moving average is $248.20. Onto Innovation Inc. has a 12-month low of $89.40 and a 12-month high of $386.46. The stock has a market cap of $13.85 billion, a price-to-earnings ratio of 130.12, a PEG ratio of 1.14 and a beta of 1.55.

Onto Innovation (NYSE:ONTO – Get Free Report) last posted its quarterly earnings data on Tuesday, May 5th. The semiconductor company reported $1.42 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $1.38 by $0.04. Onto Innovation had a net margin of 10.32% and a return on equity of 11.68%. The firm had revenue of $291.95 million for the quarter, compared to the consensus estimate of $292.00 million. During the same period in the previous year, the firm earned $1.51 EPS. The business’s revenue for the quarter was up 9.5% compared to the same quarter last year. As a group, equities research analysts expect that Onto Innovation Inc. will post 7.14 earnings per share for the current year.

Onto Innovation Company Profile (Free Report)

Onto Innovation (NYSE:ONTO) is a global supplier of advanced process control and inspection systems for semiconductor and electronics manufacturers. The company’s solutions span metrology, inspection, defect review and lithography mask repair, helping customers optimize yield, reduce costs and improve device performance. By integrating high-resolution optical and e-beam tools with sophisticated software analytics, Onto Innovation enables wafer, mask and advanced packaging producers to maintain tight process control across leading-edge nodes and specialty applications.

Key products include high-throughput wafer metrology systems, optical and e-beam defect inspection platforms, mask inspection and repair tools, and data-driven software for yield management and process optimization.

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Key Takeaways Onto Innovation expects advanced nodes business to grow about 25% in 2026, above the industry WFE growth.ONTO sees momentum from logic, DRAM, early NAND recovery and new customer capacity expansions.ONTO expects over 15% sequential revenue growth on rising backlog and broader product adoption. AI, HPC, advanced packaging and next-generation memory are driving unprecedented demand for cutting-edge chips. As manufacturers push toward two-nanometer (2nm) and even smaller process technologies, the need for precision metrology and inspection has been rising. Among the companies benefiting from this trend is Onto Innovation, Inc. (ONTO - Free Report) . Being a semiconductor process control specialist, it has consistently delivered strong financial performance while expanding its presence across advanced logic, memory and advanced packaging. 

Onto Innovation's advanced nodes business continues to gain momentum across both logic and memory markets. The Atlas G6 platform is seeing wider adoption after strong competitive evaluations at leading logic customers, while DRAM manufacturers are increasingly using it for next-generation device development. The company also secured a new TSV metrology application win, with initial shipments expected in the second half of 2026. Supported by strong demand in logic and DRAM, along with early signs of a NAND recovery, Onto Innovation expects its advanced nodes business to grow about 25% in 2026, outpacing industry wafer fab equipment growth.

Per management, advanced nodes' revenues more than doubled in 2025, driven by its strong OCD position with leading global logic and memory manufacturers, despite minimal China exposure. Films and integrated metrology also hit record revenues, with integrated metrology expanding beyond memory to include two leading-edge logic customers. Onto Innovation expects the momentum to accelerate in the second half of 2026, driven by customer capacity expansions, growing product adoption and a rising backlog, supporting more than 15% sequential revenue growth.

If AI-driven semiconductor investment remains resilient and advanced-node manufacturing expands as expected, ONTO appears well-positioned to extend its winning streak as the semiconductor industry transitions to increasingly complex manufacturing nodes.

How Does ONTO Stack Up Against Semiconductor Rivals?KLA Corporation (KLAC - Free Report) continues to benefit from AI-driven spending in leading-edge foundry/logic, HBM and advanced packaging, supporting market share gains in process control and steady services growth that helps anchor cash generation. KLA's advanced systems and longer tool lifecycles are driving high-margin service growth by increasing demand for tool performance and uptime. While KLA cited share gains in electron-beam inspection in 2025, the pace of customer adoption and the relative performance of competing platforms remain key variables at the most advanced nodes. If alternative approaches deliver better sensitivity or throughput economics, KLA may need higher R&D and applications spending to defend its installed base and sustain pricing.

Applied Materials (AMAT - Free Report) remains focused on the process complexity created by gate-all-around transitions and continues leading-edge node investments. In the fiscal second quarter, Semiconductor Systems delivered record foundry revenues, supported by strength in ALD, epitaxy and materials treatments, as customers ramp gate-all-around nodes while also adding capacity at advanced FinFET nodes. Management also emphasized that gate-all-around increases its available market and provides multiple opportunities for share gains in deposition, treatments, conductor etch and e-beam. The product cadence is important because it ties AMAT’s growth to architecture transitions rather than only to wafer starts. However, investments in manufacturing capacity, inventory and logistics to support customer ramps are increasing operational complexity.

ONTO Price Performance, Valuation and EstimatesONTO’s shares have soared 208.8% in the past year, outperforming the Zacks Nanotechnology industry’s growth of 203.9% and surpassing the Zacks Computer and Technology sector and the S&P 500 composite’s growth of 33.9% and 23.8%, respectively. 

Image Source: Zacks Investment Research

In terms of forward price/earnings, ONTO’s shares are trading at 35.11X, higher than the industry’s 6.8X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for ONTO has moved up for both 2026 and 2027 over the past 60 days.

Image Source: Zacks Investment Research

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

Key Takeaways Onto exceeded Q1 guidance and projected stronger Q2 revenue on sustained AI semiconductor demand.ONTO expects advanced packaging revenue to grow more than 50% in 2026, backed by AI capacity expansion.Onto expects 2026 revenue above $1.3B as backlog, new products and customer expansions drive growth. Onto Innovation Inc. (ONTO - Free Report) is benefiting from strong demand for AI compute, which is driving momentum across both front-end semiconductor manufacturing and advanced packaging. During the first quarter of 2026, the company delivered revenue above its original guidance and expects this momentum to continue with a stronger second-quarter outlook. Management expects growth to continue through the second half of the year, supported by customer capacity expansions, increasing adoption of new products and a growing backlog. This demand is being fueled by the need for high-performance computing and enabling technologies such as silicon photonics.

The company continues to expand its process control capabilities through its broad portfolio of optical metrology solutions. Onto Innovation recently announced a collaboration with Rigaku to combine optical and X-ray technologies through its Ai Diffract software. The company stated that this combination addresses process metrology challenges involving advanced materials and complex 3D structures. The partnership has already resulted in competitive wins and additional customer evaluations across memory and logic manufacturers, while also creating opportunities for software licensing and future hybrid metrology solutions.

Growing AI semiconductor demand is also supporting Onto Innovation’s advanced packaging business. The company announced the qualification of its Dragonfly G5 inspection system at a leading 2.5D logic customer following earlier wins in high-bandwidth memory applications. Dragonfly G5 offers improved sensitivity, higher throughput and multiple sensor capabilities, and shipments are ahead of schedule. The company is actively working with additional customers across more than 15 applications and over 10 customers. At the same time, shrinking interconnect dimensions have increased demand for the company's 3DI technology, leading to additional customer orders.

Onto Innovation also highlighted that AI-driven packaging capacity constraints are encouraging the adoption of panel-level packaging, where its JetStep platform has secured qualifications with packaging suppliers. Based on these factors, the company expects advanced packaging revenue to grow more than 50% in 2026 while its advanced nodes business is projected to increase approximately 25%, supported by continued demand across logic, DRAM and an early recovery in NAND.

The company anticipates second-quarter revenues of $320–$330 million, implying about 10% rise from prior estimates at the midpoint and 28% year-over-year growth. Momentum is set to build in the second half, with at least 15% growth over the first half, putting full-year 2026 revenue above $1.3 billion.

Taking a Look at ONTO’s CompetitorsApplied Materials (AMAT - Free Report) is benefiting from AI-driven demand that is shifting wafer fabrication equipment spending toward leading-edge foundry-logic, DRAM and advanced packaging, where it holds leading process positions. In the second quarter of fiscal 2026, the company delivered record revenue and the highest gross margin in more than two decades, and management sees better multi-quarter visibility as customers share longer-range forecasts. New gate-all-around and packaging products, expanding EPIC collaborations and a growing services attach rate support value-based pricing and operating leverage. For the third quarter of fiscal 2026, Applied Materials expects total revenues of $8.95 billion plus or minus $500 million. Within that outlook, Semiconductor Systems revenues are projected at about $6.90 billion, Applied Global Services at about $1.75 billion and Other at about $300 million.

KLA Corporation (KLAC - Free Report) continues to benefit from AI-driven spending in leading-edge foundry/logic, high-bandwidth memory and advanced packaging, supporting market share gains in process control and steady services growth that helps anchor cash generation. Management expects its advanced packaging portfolio revenue to rise to about $1 billion in 2026 and sees wafer equipment demand strengthening into 2027, with June quarter guidance implying another step up in revenue. For the fourth quarter of fiscal 2026, KLA expects revenues of $3.575 billion plus or minus $200 million. KLA expects foundry/logic to represent approximately 82% of Semiconductor Process Control systems revenue to semiconductor customers in the June quarter, with memory at about 18%, reflecting a mix shift that could influence both revenue composition and near-term margin dynamics.

ONTO Price Performance, Valuation and EstimatesONTO’s shares have soared 22.9% in the past three months, outperforming the Zacks Nanotechnology industry’s growth of 19.9% and surpassing the Zacks Computer and Technology sector and the S&P 500 composite’s growth of 14.2% and 9%, respectively.

Image Source: Zacks Investment Research

In terms of forward price/earnings, ONTO’s shares are trading at 37.14X, higher than the industry’s 7.19X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for ONTO has moved up for both 2026 and 2027 over the past 60 days.

Image Source: Zacks Investment Research

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

In the latest trading session, Onto Innovation (ONTO - Free Report) closed at $321.44, marking a +1.39% move from the previous day. This move outpaced the S&P 500's daily gain of 0.42%. Elsewhere, the Dow gained 0.29%, while the tech-heavy Nasdaq added 0.29%.

Heading into today, shares of the maker of semiconductor manufacturing equipment had gained 4.44% over the past month, outpacing the Computer and Technology sector's gain of 0.85% and the S&P 500's gain of 2.2%.

Market participants will be closely following the financial results of Onto Innovation in its upcoming release. The company's upcoming EPS is projected at $1.68, signifying a 34.40% increase compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $325.6 million, indicating a 28.39% increase compared to the same quarter of the previous year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $7.14 per share and a revenue of $1.33 billion, indicating changes of +44.53% and +32.56%, respectively, from the former year.

Investors should also take note of any recent adjustments to analyst estimates for Onto Innovation. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.41% upward. As of now, Onto Innovation holds a Zacks Rank of #1 (Strong Buy).

In terms of valuation, Onto Innovation is currently trading at a Forward P/E ratio of 44.42. This represents no noticeable deviation compared to its industry average Forward P/E of 44.42.

It's also important to note that ONTO currently trades at a PEG ratio of 1.29. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Nanotechnology was holding an average PEG ratio of 1.29 at yesterday's closing price.

The Nanotechnology industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 1, which puts it in the top 1% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

Here are three stocks with buy rank and strong momentum characteristics for investors to consider today, July 7th:

Applied Materials (AMAT - Free Report) : This company, which is a is a leading supplier of equipment used to manufacture semiconductor devices, flat panel displays and solar photovoltaic (PV) products, has a Zacks Rank #1 (Strong Buy), and witnessed the Zacks Consensus Estimate for its current year earnings increasing 8.7% over the last 60 days.

Applied Materials' shares gained 53.9% over the last three month compared with the S&P 500’s gain of 11.2%. The company possesses a Momentum Score of A.

Onto Innovation (ONTO - Free Report) : This company, which engages in the design, development, manufacture, and support of process control tools that perform macro-defect inspection and metrology in the United States and internationally, has a Zacks Rank #1, and witnessed the Zacks Consensus Estimate for its current year earnings increasing 4.5% over the last 60 days.

Onto Innovation's shares gained 26.4% over the last three month compared with the S&P 500’s gain of 11.2%. The company possesses a Momentum Score of A.

Bassett Furniture Industries (BSET - Free Report) : This company, which is a leading manufacturer and marketer of high quality, mid-priced home furnishings, has a Zacks Rank #1, and witnessed the Zacks Consensus Estimate for its current year earnings increasing 1.2% over the last 60 days.

Bassett Furniture Industries' shares gained 39.4% over the last three month compared with the S&P 500’s gain of 11.1%. The company possesses a Momentum Score of B.

See the full list of top ranked stocks here

Learn more about the Momentum score and how it is calculated here.

Key Takeaways Onto Innovation is gaining from AI demand, advanced packaging and HBM manufacturing growth.ONTO sees growth from Dragonfly G5, Atlas G6 and expanding advanced packaging applications.ONTO trades above industry valuation, while estimates for 2026 and 2027 have moved higher. Shares of Onto Innovation, Inc. (ONTO - Free Report) have surged 25.5% over the past month compared with the Zacks Nanotechnology industry’s growth of 24.7%. The company has outpaced the Zacks Computer and Technology sector and the S&P 500 composite’s plunge of 4.3% and 0.9%, respectively. The rally reflects growing investor optimism surrounding the company's exposure to AI, advanced semiconductor packaging and HBM manufacturing. As chipmakers continue to invest aggressively to meet demand for AI infrastructure, Onto Innovation has emerged as one of the beneficiaries of this trend.

Image Source: Zacks Investment Research

ONTO’s key competitors include KLA Corporation (KLAC - Free Report) , Camtek Ltd (CAMT - Free Report) and Nova Ltd. (NVMI - Free Report) . KLAC has grown 25.3%, while CAMT and NVMI plummeted 15.2% and 5.2%, respectively, in the same time frame.  

After such a sharp move, however, investors naturally face an important question: Is it still worth buying ONTO, or has the rally already priced in most of the good news? Let's examine what's driving the stock higher, the company's long-term prospects and whether investors should buy, hold, or wait for a better entry point.

Advanced Packaging Becomes a Major Growth Driver for ONTOThe company sees high growth potential in advanced packaging, silicon photonics, panel-level packaging and related applications. Advanced packaging is expected to grow more than 50% in 2026, driven by the rapid expansion of AI and next-generation semiconductor technologies. Silicon photonics is already moving into volume production as AI servers require faster data transfer and lower power consumption. The panel-level packaging market, currently valued at roughly $200 million, also has significant room for expansion as the industry increasingly adopts panel-based manufacturing and chiplet architectures.

At the same time, demand for smaller and denser interconnects, with bump sizes below 6 microns, continues to rise, creating additional opportunities across the advanced packaging ecosystem. Despite ongoing supply chain headwinds, lead times remain well-managed, and companies have reported no major impact on customer commitments or delivery schedules. Onto Innovation sees a strong growth runway in the 2.5D logic market, supported by deeper engagement with a key customer and an expanding set of applications. Previous system limitations have been removed, enabling the company to pursue more than 15 applications that were previously out of reach, expanding its serviceable addressable market.

Management also indicated that its current outlook may be conservative, leaving room for upside in the second half of the year, with the momentum expected to extend into 2027 as customer adoption broadens. At the same time, the company is benefiting from a more diversified customer base, as advanced packaging customers increasingly outsource high-value process steps. By strengthening its position with outsourced manufacturing partners, ONTO is reducing customer concentration, expanding its market reach and building a more diversified and sustainable long-term revenue base.

ONTO continues strengthening its competitive edge through multiple product wins and market expansion efforts. Its Dragonfly G5 inspection system has been qualified by a top 2.5D logic customer, with shipments already ahead of schedule and demand expected to grow through 2026. Further, the Atlas G6 platform is gaining momentum in advanced-node manufacturing, with management predicting 25% growth in 2026. A new through-silicon via metrology application is set for initial shipments in the second half of 2026.

Image Source: Zacks Investment Research

For 2027, it anticipates outpacing wafer fab equipment industry growth through ongoing market share gains, driven by Dragonfly G5's nearly $1 billion addressable market, the continued expansion of Atlas G6 in gate-all-around applications, new surface charge metrology and panel-level packaging offerings and a strong pipeline of new applications for a wider customer base.

Risks Faced By ONTODespite its strong long-term prospects, Onto Innovation faces several risks. The semiconductor equipment industry remains highly cyclical, making customer spending vulnerable to shifts in inventory levels and end-market demand. The company also relies on a handful of large semiconductor customers, leaving results exposed to delays in capital spending. In addition, export controls and geopolitical tensions continue to create uncertainty for semiconductor equipment suppliers, potentially limiting future growth opportunities. Intense competition from larger industry players further pressures Onto Innovation to continue heavy R&D investments to maintain its technological edge.

Favorable Estimate Revision Trend for ONTOEarnings estimates for ONTO have moved up for both 2026 and 2027 over the past 60 days.

Image Source: Zacks Investment Research

Is ONTO’s Valuation Becoming Stretched?Valuation is the primary concern after ONTO's 26% rally, with semiconductor equipment stocks typically trading at rich multiples during upcycles. In terms of forward price/earnings, ONTO’s shares are trading at 41X, higher than the industry’s 8.05X.

Image Source: Zacks Investment Research

KLAC, CAMT and NVMI are trading at multiples of 71.69X, 43.13X and 47.12X, respectively.

Should Investors Buy, Hold or Fold ONTO Stock?Onto Innovation has become one of the more compelling semiconductor equipment companies benefiting from the AI boom. The recent rally reflects investors' growing confidence in these opportunities, but it also raises valuation expectations. While the stock may experience near-term volatility after such a sharp advance, the company's long-term fundamentals remain solid.

For existing shareholders, the recent surge reinforces the strength of Onto Innovation's business model and supports a hold stance, particularly for those with a multi-year investment horizon. For prospective investors, the company remains attractive, but initiating a position gradually or waiting for a pullback could offer a more balanced entry point.

ONTO currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

Onto Innovation (ONTO - Free Report) ended the recent trading session at $323.92, demonstrating a -5.9% change from the preceding day's closing price. The stock trailed the S&P 500, which registered a daily loss of 0.05%. Meanwhile, the Dow lost 0.09%, and the Nasdaq, a tech-heavy index, lost 0.24%.

Heading into today, shares of the maker of semiconductor manufacturing equipment had gained 33.01% over the past month, outpacing the Computer and Technology sector's loss of 2.81% and the S&P 500's loss of 1.42%.

Market participants will be closely following the financial results of Onto Innovation in its upcoming release. It is anticipated that the company will report an EPS of $1.68, marking a 34.4% rise compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $325.6 million, indicating a 28.39% increase compared to the same quarter of the previous year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $7.14 per share and revenue of $1.33 billion, which would represent changes of +44.53% and +32.56%, respectively, from the prior year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Onto Innovation. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, there's been a 1.24% rise in the Zacks Consensus EPS estimate. Onto Innovation is holding a Zacks Rank of #3 (Hold) right now.

From a valuation perspective, Onto Innovation is currently exchanging hands at a Forward P/E ratio of 48.23. This indicates no noticeable deviation in contrast to its industry's Forward P/E of 48.23.

It's also important to note that ONTO currently trades at a PEG ratio of 1.41. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. As of the close of trade yesterday, the Nanotechnology industry held an average PEG ratio of 1.41.

The Nanotechnology industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 107, putting it in the top 44% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

On June 23, 2026, Onto Innovation Inc ONTO shares fell 9.2% today, closing at $315.88. This move comes after a strong year of performance, with shares up 236.8% over the past year and having reached a 52-week high of $349.38. The stock has shown significant volatility, with a 52-week low of $89.40.

GF Value™ verdict: Onto Innovation's current price is $315.88, which is 66.9% above its GF Value™ estimate of $189.26.GF Score™ of 78/100 indicates that the stock is above average in terms of quality and potential for long-term returns.Notable signal: The stock has not seen any insider transactions in the last three months. Is ONTO Overvalued or Undervalued? Based on the current price of $315.88 and the GF Value™ of $189.26, Onto Innovation Inc appears to be significantly overvalued, with a margin of safety of 66.9%. This overvaluation is supported by the GF Valuation label, which categorizes the stock as significantly overvalued. Investors may face risks associated with buying into a stock that is priced so far above its intrinsic value, as it raises concerns about the sustainability of its current price levels, particularly in light of market volatility and changing economic conditions.

GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates. When the market price significantly exceeds the GF Value™, as is the case with ONTO, it often signals potential downside risk for investors if the stock fails to meet high growth expectations.

How Does ONTO's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 147.6x 36.8x Forward P/E 43.9x N/A Currently, Onto Innovation's P/E (TTM) stands at 147.6x, which is 301% above its 5-year median P/E of 36.8x. The forward P/E of 43.9x further underscores the high valuation compared to its historical levels. This P/E analysis agrees with the GF Value™ verdict, reinforcing the conclusion that the stock is trading at a significantly inflated valuation.

What Does ONTO's GF Score™ Tell Us? Metric Rating GF Score™ 78/100 Financial Strength 8/10 Profitability 8/10 Growth 9/10 Valuation 1/10 Momentum 6/10 Onto Innovation's GF Score™ of 78/100 reflects a strong overall performance, particularly in the areas of Growth (9/10) and Financial Strength (8/10). However, the Valuation rank of 1/10 indicates a significant concern regarding its current pricing relative to intrinsic value. This disparity between high growth potential and poor valuation suggests that while the company has strong operational metrics, the current market price presents substantial risk for potential investors.

What Are Insiders Doing with ONTO Stock? In the past three months, there have been no insider transactions reported for Onto Innovation Inc. This lack of activity may suggest that insiders are not currently buying or selling shares, potentially indicating a wait-and-see approach regarding the stock's future performance. Insider transactions can often be a signal of confidence or concern regarding a company's prospects, and the absence of activity might reflect a cautious stance in light of the stock's recent performance and valuation concerns.

What This Means for Investors Based on the analysis of GF Value™, Onto Innovation Inc ONTO is currently categorized as overvalued. The significant gap between the current market price and the GF Value™ suggests that potential risks are heightened for investors considering entry at this price level. Careful evaluation of the company's performance and market conditions is essential before making any investment decisions.

For the complete analysis, visit the Onto Innovation Inc ONTO stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.

Frequently Asked Questions What is ONTO's GF Score™?

ONTO has a GF Score™ of 78/100, indicating that it is above average in quality and potential for long-term returns.

Is ONTO overvalued or undervalued?

ONTO is currently overvalued, with its market price exceeding the GF Value™ estimate by 66.9%.

What is ONTO's P/E ratio?

ONTO's P/E (TTM) ratio is 147.6x, which is significantly above its 5-year median P/E of 36.8x, indicating a high valuation relative to its historical performance.

This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].

Key Takeaways ONTO exceeded first-quarter revenue guidance as AI compute boosted front-end and advanced packaging demand.Onto expects advanced packaging revenue to grow more than 50% in 2026 on established and new products.ONTO sees Dragonfly G5 shipments nearly doubling each quarter, with 15 applications across 10 customers. Onto Innovation Inc. (ONTO - Free Report) is capitalizing on rising advanced packaging demand by expanding its inspection and metrology portfolio, accelerating new product adoption and strengthening its position across high-performance AI compute applications. On the last earnings call, management highlighted that strong demand for AI compute is driving momentum across both front-end and advanced packaging, contributing to first-quarter revenue that exceeded its original guidance and supporting expectations for continued growth throughout 2026.

Management also expects customer expansions, new product adoption and a growing backlog to sustain this momentum. The company believes its broad optical process control portfolio provides customers with actionable manufacturing intelligence that supports increasingly complex packaging requirements.

A major contributor to this strategy is the qualification and adoption of the Dragonfly G5 inspection system at a leading 2.5D logic customer, following earlier wins in high-bandwidth memory for both 2D inspection and 3D metrology. Onto Innovation stated that the new platform delivers improved sensitivity, high throughput and the flexibility of multiple sensors, creating a differentiated value proposition for customers. Shipments are running ahead of plan, while the company is actively engaging with new customers and applications. With more than 15 distinct applications across over 10 customers in the pipeline, management views Dragonfly G5 as an opportunity to gain share in existing markets while expanding into new ones.

Onto Innovation is also benefiting from advanced packaging trends, with rising 3DI adoption, growing OSAT orders and JetStep qualification for panel-level packaging amid increasing AI-driven demand.

Management expects advanced packaging revenue to grow more than 50% in 2026, supported by contributions from both established and emerging products. While Dragonfly G5 currently represents a relatively small portion of advanced packaging revenue, the platform is ramping steadily, with shipments expected to nearly double each quarter throughout the year. The company also indicated that demand for the Dragonfly G3 continues to increase.

Additionally, Onto Innovation sees growing opportunities in surface charge metrology as chiplet architectures become more mainstream, as well as in panel-level packaging solutions through JetStep and Firefly, reflecting expanding demand across multiple advanced packaging technologies.

Taking a Look at ONTO’s CompetitorsApplied Materials (AMAT - Free Report) is benefiting from AI-driven demand that is shifting wafer fabrication equipment spending toward leading-edge foundry-logic, DRAM and advanced packaging, where it holds leading process positions. Applied Materials expects its packaging revenues to grow more than 50% in calendar 2026, with investments shifting toward its leadership positions in 3D stacking. This outlook is reinforced by Applied Materials’ intent to acquire NEXX, which would add panel-level electrochemical deposition capabilities and broaden its portfolio for larger-body AI accelerator packages. Management framed packaging as one of the most enabling parts of AI compute systems, which can extend the duration of packaging investment beyond a single memory build cycle.

KLA Corporation (KLAC - Free Report) continues to benefit from AI-driven spending in leading-edge foundry/logic, high-bandwidth memory and advanced packaging, supporting market share gains in process control and steady services growth that helps anchor cash generation. Management expects its semiconductor process control advanced packaging portfolio revenue to grow from about $635 million in 2025 to about $1 billion in 2026, and it sees the wafer equipment market, including advanced packaging, exceeding $140 billion in 2026 with faster growth in 2027. For the fourth quarter of fiscal 2026, KLA expects revenues of $3.575 billion plus or minus $200 million.

ONTO Price Performance, Valuation and EstimatesONTO’s shares have soared 226.1% in the past year, underperforming the Zacks Nanotechnology industry’s growth of 242.1% but surpassing the Zacks Computer and Technology sector and the S&P 500 composite’s growth of 49.2% and 31.6%, respectively.

Image Source: Zacks Investment Research

In terms of forward price/earnings, ONTO’s shares are trading at 38.34X, higher than the industry’s 7.99X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for ONTO has moved up for both 2026 and 2027 over the past 60 days.

Image Source: Zacks Investment Research

Onto Innovation currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Takeaways Onto Innovation topped Q1 revenue and EPS estimates on strong AI and advanced packaging demand.ONTO raised its 2026 outlook and targets an operating margin above 30% by fourth-quarter 2026.ONTO highlighted Dragonfly G5 and Atlas G6 traction amid rising HBM and AI chip demand. Onto Innovation Inc. (ONTO - Free Report) described first-quarter 2026 as a better-than-expected start, fueled by strong AI-driven demand in advanced nodes and advanced packaging. The company also raised its 2026 outlook, projecting revenue growth of more than 30% and targeting an operating margin above 30% by the fourth quarter.

Both the top and bottom-line figures surpassed the respective Zacks Consensus Estimate as well as management’s expectations. Onto Innovation reported first-quarter revenues of $291.9 million, up 9.5% year over year and ahead of its expectations ($275–$285 million). Non-GAAP EPS came in at $1.42, also above forecasts ($1.26-$1.36). The semiconductor equipment company continues to benefit from strong AI-driven demand, advanced packaging adoption and next-generation chip manufacturing trends.

ONTO’s shares have soared 204.5% in the past year, outperforming the Zacks Nanotechnology industry’s growth of 198.9%. The company has also outpaced the Zacks Computer and Technology sector and the S&P 500 composite’s growth of 53.8% and 31.8%, respectively.

Image Source: Zacks Investment Research

ONTO’s key competitors include KLA Corporation (KLAC - Free Report) , Camtek Ltd (CAMT - Free Report) and Applied Materials (AMAT - Free Report) . KLAC, CAMT and AMAT have grown 145.8%, 197% and 159.2%, respectively, in the same time frame.

But after the stock’s massive run over the past year, investors are asking an important question: Is ONTO still a buy, or has the rally already priced in the good news?

Let’s dig deep.

Why Investors are Bullish on ONTOThe major tailwind for Onto Innovation is the ongoing AI infrastructure boom. Advanced AI chips require more sophisticated packaging, higher precision inspection, advanced metrology tools and increased defect detection. Onto Innovation specializes in these areas. As companies like NVIDIA, Taiwan Semiconductor Manufacturing Company and memory manufacturers ramp AI production, Onto Innovation’s tools become increasingly essential. Management specifically referenced “insatiable” AI compute demand during earnings commentary. This positions ONTO as a secondary beneficiary of the AI boom without directly competing in chip design.

Rising demand for advanced semiconductor nodes, strong AI and high-bandwidth memory (HBM) investments, adoption of new inspection and metrology platforms and expansion in advanced packaging technologies augur well. Management highlighted strong traction for the Dragonfly G5 inspection system and Atlas G6 platform, both of which are gaining adoption among leading chipmakers. Advanced packaging technologies, such as 2.5D and 3D integration, are becoming essential for AI accelerators and high-performance computing chips. As chipmakers seek higher performance and better power efficiency, packaging complexity is increasing rapidly.

Image Source: Zacks Investment Research

The Dragonfly G5 platform addresses this trend by enabling more advanced defect inspection and process monitoring capabilities. Winning qualifications from both logic and HBM customers signals that Onto Innovation is strengthening its position in one of the fastest-growing semiconductor equipment segments. This is particularly important because HBM demand has surged alongside AI infrastructure growth. Companies producing GPUs and AI accelerators require increasingly sophisticated memory architectures, creating a major opportunity for semiconductor process control vendors like Onto Innovation.

Another major development was Onto Innovation’s collaboration with Rigaku Holdings Corporation. As part of the partnership, ONTO will purchase a 27% ownership stake in Rigaku for approximately $710 million. The transaction is expected to close in the second half of 2026. The partnership gives Onto Innovation access to a broader portfolio of advanced X-ray technologies, which could significantly enhance its semiconductor inspection and metrology capabilities. It expects three key benefits from the Rigaku deal — high-margin AI Diffract software licensing revenue, increased sales of metrology tools like Atlas G6 and annual dividend income of about $7 million — with these gains expected to offset lost interest income within a year of closing.

Combined with its earlier Semilab USA acquisition, Onto Innovation is clearly pursuing a strategy centered around expanding its process control ecosystem. These investments may help Onto Innovation address increasingly complex semiconductor manufacturing challenges while creating additional long-term revenue streams.

ONTO’s Profitability Mixed, Non-GAAP Margins Remain StrongDespite record revenue, Onto Innovation’s GAAP profitability metrics declined year over year. GAAP gross margin fell to 50.1% from 53.7% in the prior-year quarter. Operating income also declined significantly, with GAAP operating margin dropping to 11.5% from 23.7%.

However, non-GAAP results painted a more stable picture. Non-GAAP gross margin improved slightly to 55.7%, while non-GAAP operating income rose to $77.9 million. The disparity between GAAP and non-GAAP figures likely reflects acquisition-related costs, stock compensation expenses and investments tied to future growth initiatives. Importantly, Onto Innovation maintained strong profitability relative to many peers in the semiconductor equipment industry. A non-GAAP operating margin above 26% demonstrates that the company continues to generate healthy operational leverage even while investing aggressively for expansion.

Onto Innovation ended the quarter with approximately $654 million in cash and short-term investments. The company also generated roughly $26 million in operating cash flow during the first quarter, providing additional financial flexibility. While the Rigaku investment represents a sizable capital commitment, Onto Innovation’s strong balance sheet positions it well to pursue strategic initiatives without placing excessive pressure on liquidity. The company’s financial strength could become increasingly valuable as semiconductor manufacturers accelerate spending on advanced packaging, AI infrastructure and next-generation fabrication technologies.

Despite the strong quarter, investors should understand the risks. Onto Innovation remains exposed to semiconductor industry cycles, including weaker electronics demand, inventory corrections, geopolitical risks and reduced chip-equipment spending. Onto Innovation competes against major semiconductor equipment players. Larger competitors have deeper resources and broader product portfolios. ONTO’s success depends on maintaining technological leadership in niche but critical areas of semiconductor inspection and metrology. Management highlighted rising cost pressures from higher material and fuel expenses, along with increased investments in R&D and service teams in the near term.

ONTO’s Stock is ExpensiveONTO has rallied significantly over the past year, and the valuation now reflects high expectations. In terms of forward price/earnings, ONTO’s shares are trading at 37.7X, higher than the industry’s 7.45X.

Image Source: Zacks Investment Research

KLAC, CAMT and AMAT are trading at multiples of 38.92X, 60.4X and 34.27X, respectively.

Upbeat Estimate Revision Trend for ONTOEarnings estimates for ONTO have moved up for both 2026 and 2027 over the past 60 days.

Image Source: Zacks Investment Research

Should You Buy ONTO Stock?ONTO appears to be a high-quality AI semiconductor infrastructure play with strong long-term growth potential. The company is executing well, benefiting from industry megatrends and showing improving operational leverage. Its latest results underscore how AI infrastructure spending, advanced packaging technologies and next-generation chip manufacturing are becoming major growth drivers across the semiconductor equipment industry.

While some profitability metrics softened on a GAAP basis, Onto Innovation’s strategic positioning in advanced nodes, HBM and GAA process control continues to strengthen. Investors also received a bullish second-quarter outlook that suggests demand remains healthy despite broader macroeconomic uncertainty. Onto Innovation suits investors seeking long-term AI-driven semiconductor infrastructure growth and willing to accept volatility, though valuation concerns and cyclical industry risks warrant caution.

Currently flaunting a Zacks Rank #1 (Strong Buy), ONTO seems to be a value addition for your portfolio.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Takeaways Onto secured a $240M HBM metrology agreement through 2027 tied to AI infrastructure demand.ONTO expects Dragonfly platform demand to rise more than 50% in 2026 versus 2025.Atlas G6 won a second logic customer as gate-all-around and DRAM adoption expands. Semiconductor equipment stocks have been among the biggest beneficiaries of the AI boom, and Onto Innovation, Inc. (ONTO - Free Report) is increasingly emerging as a compelling player in this space. The company’s flagship offerings — especially the Dragonfly G5 inspection platform and Atlas G6 metrology system — are gaining traction at a critical time when chipmakers are racing to scale advanced AI packaging and next-generation memory production.

The Dragonfly G5 is designed specifically for the increasing complexity of advanced semiconductor packaging used in AI accelerators, HBM and heterogeneous integration. Onto has secured a volume purchase agreement with an HBM customer for Dragonfly 2D and 3D bump metrology systems through 2027, valued at over $240 million, including more than $60 million for 3D systems. This agreement links Onto Innovation directly to the rapid growth of AI infrastructure, where HBM plays a vital role in enabling high-performance computing. With more than 15 applications across more than 10 customers, Dragonfly G5 has a strong growth outlook, driving both market share gains and expansion into new opportunities.

The bullish case strengthened further in April when Onto Innovation disclosed that the Dragonfly G5 had been qualified for 2.5D AI packaging applications. Management also noted that demand for the Dragonfly platform is now expected to grow more than 50% in 2026 from 2025. While Dragonfly G5 continues to capture investor focus, Atlas G6 may hold comparable long-term significance. Atlas G was selected by a second logic customer for gate-all-around metrology applications, positioning it to benefit from the semiconductor industry’s shift beyond FinFET architectures.

Adoption of Onto Innovation’s Atlas G6 is expanding across next-generation logic and DRAM applications, supported by competitive wins and new TSV metrology orders. With strength in logic, memory and improving NAND demand, the company expects advanced-nodes revenue growth of roughly 25% in 2026, outpacing broader wafer fabrication equipment (WFE) growth.

Competitive Pressure Dampening ONTO’s Growth UpsideKLA Corporation (KLAC - Free Report) is benefiting from strong demand for leading-edge logic, HBM and advanced packaging. With healthy momentum in advanced packaging management, it now expects semiconductor process control revenue in the segment to rise from about $635 million in 2025 to nearly $1 billion in 2026, far exceeding prior forecasts. KLAC expects the semiconductor industry to witness an 11% CAGR through 2030, with the WFE market reaching roughly $215 billion. As process control becomes increasingly critical, the company believes it can continue outpacing broader wafer equipment market growth. However, extended U.S. export controls on China and tariff-related uncertainties pose concerns.

Applied Materials (AMAT - Free Report) is riding on AI-driven semiconductor innovation, advanced packaging and market share gains in foundry logic. The emergence of data centers continues to be a major contributor to the company's top-line growth, with the growing demand for DRAM by cloud service providers. It is benefiting from AI-driven semiconductor advances, with leadership in GAA transistors, HBM, advanced packaging and silicon photonics expected to expand the WFE market and support long-term growth. AMAT is strengthening its advanced packaging leadership, driven by strong demand for hybrid bonding solutions, and expects the business to reach $3 billion in the coming years despite normalized HBM-related growth.

ONTO Price Performance, Valuation and EstimatesONTO’s shares have soared 178.9% in the past year, outperforming the Zacks Nanotechnology industry’s growth of 176.3% as well as the Zacks Computer and Technology sector and the S&P 500 composite’s growth of 51.5% and 30.7%, respectively.

Image Source: Zacks Investment Research

In terms of forward price/earnings, ONTO’s shares are trading at 36.62X, higher than the industry’s 7.24X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for ONTO has moved up for both 2026 and 2027 over the past 60 days.

Image Source: Zacks Investment Research

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

WILMINGTON, Mass.--(BUSINESS WIRE)---- $ONTO--Onto Innovation Inc. (NYSE: ONTO) (“Onto Innovation” or the “Company”) today announced that it intends to offer, subject to market and other conditions, $1,100,000,000 aggregate principal amount of Convertible Senior Notes due 2031 (the “Notes”), to be sold only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). Onto Innovation also expects to grant to.

Onto Innovation Inc. (NYSE: ONTO) (“Onto Innovation” or the “Company”) today announced the pricing of its private offering of $1,300,000,000 aggregate principal amount of 0.00% Convertible Senior Notes due 2031 (the “Notes”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The size of the offering was increased from the previously announced $1,100,000,000 aggregate principal amount of Notes. Onto Innovation also granted the initial purchasers of the Notes an option to purchase up to an additional $200,000,000 aggregate principal amount of the Notes, for settlement within a 13-day period beginning on, and including, the first date on which the Notes are issued. The offering of the Notes is expected to close on May 21, 2026, subject to customary closing conditions.

The Notes will have an initial conversion price of approximately $381.80 per share of Onto Innovation’s common stock, which represents a premium of approximately 50.0% to the last reported sale price of Onto Innovation’s common stock on The New York Stock Exchange (the “NYSE”) on May 18, 2026.

In connection with the pricing of the Notes, Onto Innovation entered into capped call transactions with an initial cap price of $509.06 per share of Onto Innovation’s common stock, which represents a premium of 100.0% to the last reported sale price of Onto Innovation’s common stock on the NYSE on May 18, 2026.

Onto Innovation estimates that the net proceeds from the offering will be approximately $1,274 million (or $1,470 million if the initial purchasers exercise their option to purchase additional Notes in full) after deducting the initial purchasers’ discount and commissions but before estimated offering expenses payable by it.

Onto Innovation intends to use (i) approximately $77.1 million of the net proceeds to fund the cost of entering into the capped call transactions described below, (ii) approximately $205,000,000 of the net proceeds to repurchase approximately 0.8 million shares of its common stock concurrently with the pricing of the offering in privately negotiated transactions effected with or through one of the initial purchasers or one or more of its affiliates, at a price per share equal to $254.53, the last reported sale price per share of Onto Innovation’s common stock on the NYSE on May 18, 2026 and (iii) the remaining net proceeds for general corporate purposes, which may include financing the previously announced acquisition of 27% of the issued and outstanding shares of the common stock of Rigaku Holdings Corporation.

The Notes will be Onto Innovation’s senior unsecured obligations and will mature on June 1, 2031, unless earlier converted, redeemed or repurchased. The Notes will not bear regular interest, and the principal amount of the Notes will not accrete.

Before March 1, 2031, noteholders will have the right to convert their Notes only upon the occurrence of certain events. From and after March 1, 2031, noteholders may convert their Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. The initial conversion rate is 2.6192 shares of common stock per $1,000 principal amount of Notes. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events. Onto Innovation will satisfy its conversion obligations by paying cash up to the aggregate principal amount of Notes to be converted and paying or delivering, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at its election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the Notes being converted.

The Notes will not be redeemable before June 6, 2029. The Notes will be redeemable, in whole or in part (subject to certain limitations), for cash at Onto Innovation’s option at any time, and from time to time, on or after June 6, 2029 and before the 31st scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of Onto Innovation’s common stock exceeds 130% of the conversion price for a specified period of time and certain other conditions are satisfied. The redemption price will be equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid special and additional interest, if any, to, but excluding, the redemption date. In addition, upon a notice of redemption, Onto Innovation will, under certain circumstances, increase the conversion rate for noteholders who convert Notes in connection with such notice of redemption.

If a “fundamental change” (as defined in the indenture for the Notes) occurs, then, subject to a limited exception, noteholders may require Onto Innovation to repurchase their Notes for cash. The repurchase price will be equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid special and additional interest, if any, to, but excluding, the applicable repurchase date. In addition, upon certain corporate events, Onto Innovation will, under certain circumstances, increase the conversion rate for noteholders who convert Notes in connection with such a corporate event.

Capped Call

In connection with the pricing of the Notes, Onto Innovation entered into privately negotiated capped call transactions with certain financial institutions, including one or more of the initial purchasers (the “option counterparties”). The capped call transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the Notes, the number of shares of Onto Innovation’s common stock initially underlying the Notes. If the initial purchasers exercise their option to purchase additional Notes, then Onto Innovation expects to enter into additional capped call transactions with the option counterparties. The capped call transactions are expected generally to reduce the potential dilution to Onto Innovation’s common stock upon any conversion of the Notes and/or offset any potential cash payments Onto Innovation is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap. The cap price of the capped call transactions will initially be $509.06, which represents a premium of 100.0% over the last reported sale price of Onto Innovation’s common stock of $254.53 per share on the New York Stock Exchange on May 18, 2026, and is subject to certain adjustments under the terms of the capped call transactions.

Onto Innovation has been advised that, in connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to purchase shares of Onto Innovation’s common stock and/or enter into various derivative transactions with respect to Onto Innovation’s common stock concurrently with or shortly after the pricing of the Notes. This activity could increase (or reduce the size of any decrease in) the market price of Onto Innovation’s common stock or the Notes at that time. In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Onto Innovation’s common stock and/or purchasing or selling Onto Innovation’s common stock or other securities issued by Onto Innovation in secondary market transactions following the pricing of the Notes and prior to the maturity of the Notes (and (x) are likely to do so during any averaging period related to a conversion of the Notes, following any redemption of the Notes by Onto Innovation or following any repurchase of the Notes by Onto Innovation in connection with any fundamental change and (y) are likely to do so following any repurchase of the Notes by Onto Innovation other than in connection with any such redemption or any such fundamental change if Onto Innovation elects to unwind a corresponding portion of the capped call transactions in connection with such repurchase). This activity could also cause or avoid an increase or a decrease in the market price of Onto Innovation’s common stock or the Notes, which could affect a noteholder’s ability to convert the Notes and, to the extent the activity occurs during any averaging period related to a conversion of the Notes, it could affect the number of shares of Onto Innovation’s common stock and value of the consideration that a noteholder will receive upon conversion of the Notes.

In addition, if any such capped call transaction fails to become effective, whether or not the offering of the Notes is completed, the option counterparty party thereto may unwind its hedge positions with respect to Onto Innovation’s common stock, which could adversely affect the value of Onto Innovation’s common stock and, if the Notes have been issued, the value of the Notes.

Share Repurchases

The concurrent repurchases of approximately $205,000,000 of shares of Onto Innovation’s common stock described above may have resulted in the common stock trading at prices that are higher than would be the case in the absence of these repurchases, which may have resulted in a higher initial conversion price for the Notes.

Notices

The Notes will be offered and sold only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act. The Notes and any shares of Onto Innovation’s common stock issuable upon conversion of the Notes have not been registered under the Securities Act, or under the securities laws of any state or other jurisdiction, and the Notes and any such shares may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the applicable securities laws of any state or other jurisdiction.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the Notes or any shares of Onto Innovation’s common stock issuable upon conversion of the Notes, nor shall there be any offer, solicitation or sale of any Notes or any such shares of Onto Innovation’s common stock issuable upon conversion of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Onto Innovation Inc.

Onto Innovation is a leader in process control, combining global scale with an expanded portfolio of leading-edge technologies that includes un-patterned wafer quality, 3D metrology spanning chip features from nanometer scale transistors to large die interconnects, macro defect inspection of wafers and packages, metal interconnect composition, factory analytics, and lithography for advanced semiconductor packaging.

Our breadth of offerings across the entire semiconductor value chain helps our customers solve their most difficult yield, device performance, quality, and reliability issues. Onto Innovation strives to optimize customers’ critical path of progress by making them smarter, faster and more efficient.

Headquartered in Wilmington, Massachusetts, Onto Innovation supports customers with a worldwide sales and service organization.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”) which include statements relating to the timing, size and completion of the proposed Notes offering, the intended use of proceeds, including the capped call transactions and the share repurchase, the terms of the Notes being offered and the anticipated terms of, and the effects of entering into, the share repurchase and the capped call transactions and the actions of the option counterparties and their respective affiliates, as well as other matters that are not purely historical data. Onto Innovation wishes to take advantage of the “safe harbor” provided for by the Act and cautions that actual results may differ materially from those projected as a result of various factors, including risks and uncertainties, many of which are beyond Onto Innovation’s control. Such factors include, but are not limited to, the Company’s ability to leverage its resources to improve its position in its core markets; its ability to weather difficult economic environments; its ability to open new market opportunities and target high-margin markets; the strength/weakness of the back-end and/or front-end semiconductor market segments; fluctuations in customer capital spending; the Company’s ability to effectively manage its supply chain and adequately source components from suppliers to meet customer demand; the effects of political, economic, legal, and regulatory changes, including tariffs and trade disputes, or conflicts on the Company's global operations; its ability to adequately protect its intellectual property rights and maintain data security; the effects of natural disasters or public health emergencies on the global economy and on the Company’s customers, suppliers, employees, and business; its ability to effectively maneuver global trade issues and changes in trade and export regulations, tariffs and license policies; the Company’s ability to maintain relationships with its customers and manage appropriate levels of inventory to meet customer demands; the Company's ability to realize the anticipated benefits of the proposed Notes offering and the capped call transactions on the timing expected or at all; and the Company’s ability to successfully integrate acquired businesses and technologies. You should be aware that these statements and any other forward-looking statements in this press release reflect only Onto Innovation’s expectations and are not guarantees of performance or any particular outcome. Additional information and considerations regarding the risks faced by Onto Innovation are available in Onto Innovation’s Form 10-K for the fiscal year ended January 3, 2026, as filed with the SEC on February 24, 2026, and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 as filed with the SEC on May 5, 2026. As the forward-looking statements are based on Onto Innovation's current expectations, the Company cannot guarantee any related future results, levels of activity, performance or achievements. Onto Innovation does not assume any obligation to update the forward-looking information contained in this press release, except as required by law.

Source: Onto Innovation Inc.
ONTO-I

View source version on businesswire.com: https://www.businesswire.com/news/home/20260518453118/en/

Here are three stocks with buy rank and strong momentum characteristics for investors to consider today, May 21:

Onto Innovation Inc. (ONTO - Free Report) : This semiconductor equipment company has a Zacks Rank #1 and witnessed the Zacks Consensus Estimate for its current year earnings increasing 6.6% over the last 60 days.

Onto Innovation's shares gained 23.4% over the last three months compared with the S&P 500’s decline of 7.9%. The company possesses a Momentum Score of A.

Flywire Corporation (FLYW - Free Report) : This fintech company has a Zacks Rank #1 and witnessed the Zacks Consensus Estimate for its current year earnings increasing 17.7% over the last 60 days.

Flywire’s shares gained 49.5% over the last three months compared with the S&P 500’s decline of 7.9%. The company possesses a Momentum Score of A.

Green Plains Inc. (GPRE - Free Report) : This low-carbon fuels company has a Zacks Rank #1 and witnessed the Zacks Consensus Estimate for its current year earnings increasing 337.5% over the last 60 days.

Green Plains’s shares gained 13.0% over the last three months compared with the S&P 500’s decline of 7.9%. The company possesses a Momentum Score of B.

See the full list of top ranked stocks here

Learn more about the Momentum score and how it is calculated here.

On May 26, 2026, Onto Innovation Inc ONTO shares rose 4.5%, bringing the current price to $274.17. The stock has seen significant volatility over the past year, with a 52-week range showing a high of $316.00 and a low of $89.40.

GF Value™ verdict: Current price is $274.17, which is 49.0% above the GF Value™ of $183.96.GF Score™ of 89/100 indicates a strong ranking, suggesting potential for good long-term returns.Most notable signal: No insider transactions in the last 3 months, indicating stability in insider confidence. Is ONTO Overvalued or Undervalued? According to GF Value™, Onto Innovation Inc is currently significantly overvalued, with the current share price of $274.17 being 49.0% higher than the estimated fair value of $183.96. This overvaluation suggests that there may be a lack of margin of safety for investors, as the market price is substantially above intrinsic value. A stock trading above its GF Value™ can pose risks, especially if market conditions change or if company performance does not meet high investor expectations.

GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates. Given that ONTO is deemed overvalued, potential investors might want to exercise caution, as a correction could occur if the stock price does not align closer to its fair value.

How Does ONTO's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 128.1x 36.6x Forward P/E 38.5x N/A The current P/E (TTM) of 128.1x significantly exceeds its 5-year median P/E of 36.6x, indicating that the stock is trading at a premium compared to its historical valuation. The forward P/E of 38.5x also suggests that the market anticipates further earnings growth, but this analysis aligns with the GF Value™ verdict of being overvalued. Therefore, the P/E analysis confirms the assessment of overvaluation indicated by GF Value™.

What Does ONTO's GF Score™ Tell Us? Metric Rating GF Score™ 89/100 Financial Strength 8/10 Profitability 8/10 Growth 9/10 Valuation 5/10 Momentum 6/10 The GF Score™ of 89/100 is an impressive rating, indicating strong financial health and growth potential. The strongest areas for Onto Innovation Inc are its Growth rank of 9/10 and Financial Strength rank of 8/10, reflecting a solid operational foundation and robust business prospects. However, the Valuation rank of 5/10 indicates that the stock may not be a good value at its current price, aligning with the previous assessment of overvaluation.

What Are Insiders Doing with ONTO Stock? In the last three months, there have been no insider transactions reported for Onto Innovation Inc. This lack of activity may suggest that insiders are confident in the company’s current standing and future prospects, or it could indicate a period of stability where insiders do not see an immediate need to buy or sell shares.

What This Means for Investors Based on the analysis of GF Value™, Onto Innovation Inc is currently overvalued. With a significant premium over its estimated fair value, potential investors may want to consider the risks involved before making any investment decisions.

For the complete analysis, visit the Onto Innovation Inc ONTO stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.

Frequently Asked Questions What is ONTO's GF Score™?

ONTO has a GF Score™ of 89/100, indicating a strong overall ranking based on financial strength, profitability, growth, valuation, and momentum.

Is ONTO overvalued or undervalued?

ONTO is currently overvalued, with a GF Value™ of $183.96 compared to its market price of $274.17, representing a significant premium.

What is ONTO's P/E ratio?

ONTO's P/E (TTM) ratio is 128.1x, which is considerably higher than its 5-year median of 36.6x, indicating that the stock is trading at a historical premium.

This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].

Everyone’s chasing obvious AI semiconductor names. NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) sits at a $5.15 trillion market cap. Taiwan Semiconductor Manufacturing (NYSE:TSM) is up 39% year to date. And Micron Technology (NASDAQ:MU) just crossed $1 trillion in market cap, joining SK Hynix and Samsung in a memory club that suddenly looks unkillable.

On a recent episode of The AI Investor Podcast, Eric Bleeker and Austin Smith argued the better trade is the company selling picks and shovels to every memory fab on the planet, up 91% in just 2.5 months. Here is the case.

The $1 Trillion Memory Backdrop Micron’s fiscal Q1 2026 report set records across the board. Revenue of $13.64 billion, up 57% year over year. The Cloud Memory unit nearly doubled to $5.28 billion with a 66% gross margin and 55% operating margin. Q2 guidance is $18.70 billion with a 68% non-GAAP gross margin.

Bleeker on the podcast: “Memory, Micron, SK Hynix, Samsung, they’re all over a trillion dollars right now because they’re getting 80% margins. There are companies that could go back down to 60% and these companies still win in a big way.” The supercycle is real. The question is how to position without paying for stocks that have already tripled.

ACM Research: 91% in 2.5 Months The AI Investor Podcast recommended ACM Research (NASDAQ:ACMR) on March 13. The stock has climbed from $46.38 to $88.64 since, up 125% year to date.

ACM supplies cleaning, electroplating, furnace, and advanced packaging tools to YMTC and CXMT, the two Chinese memory makers building domestic capacity. Bleeker called the company “a great company that’s really rock solid and is positioned in an ideal place.” His view on the build cycle: “China can’t build enough memory for itself, let alone to flood the Western market.”

Q1 2026 revenue came in at $231 million, up 34% year over year, with total shipments of $241 million, up 54%. Management maintained full-year guidance of $1.08 billion to $1.18 billion, or 21% to 30% growth and reaffirmed a $4 billion long-term revenue target. The ECP segment nearly tripled to $84 million, driven by advanced packaging adoption.

The regulatory moat matters here. China lacks access to EUV lithography systems for sub-5nm production, so the AI build happens through the layers ACMR serves: cleaning, plating, 3D packaging. That is a multi-year capex tailwind independent of any single customer hitting targets.

Onto Innovation: The Advanced Packaging Angle Onto Innovation (NYSE:ONTO) is the second leg of the trade, up 19% since late February. Onto makes metrology and inspection tools for advanced packaging, where innovation is moving as HBM stacks grow taller and 3D integration replaces traditional node shrinks. Q4 2025 set a record at $267 million, with Q1 2026 guidance of $275 to $285 million and an HBM-related volume agreement worth over $240 million through 2027.

The Old Tech Premium Austin Smith raised a wrinkle worth flagging. In a chip-starved world, any chip could be put to use. He pointed to legacy CPU inventory as evidence that old tech can command a premium. GlobalFoundries (NASDAQ:GFS) is up 132%.

The surprise: United Microelectronics (NYSE:UMC), a Taiwanese fab focused on older nodes, is up 183% year to date, outpacing Taiwan Semi. Bleeker on the podcast: “In a perverse way, buying the stuff with the older facilities has outperformed Taiwan Semiconductor this year.” Many ways to win.

What I’m Watching I have followed the semi cycle for over a decade and the lesson keeps repeating. When obvious names go vertical, second-derivative plays often have more runway. Bleeker’s read is that equipment makers like ACM Research and Onto Innovation have not run up like memory and GPU names. If Micron’s order book signals anything, the supercycle stretches into 2027, and that gap could close.

You should weigh ACMR if you believe Chinese memory capacity has years left to build. You should pass if tariff escalation or a memory glut arrives before YMTC and CXMT finish their fabs. Either way, the trillion-dollar memory club is no longer the whole story.

On June 02, 2026, Onto Innovation Inc ONTO shares rose 8.7% today, bringing the current price to $278.02. This price is within a 52-week range of $89.40 to $316.00, showing significant volatility over the past year.

GF Value™ verdict: Current price is $278.02 vs GF Value™ of $185.60, indicating the stock is 49.8% overvalued.GF Score™ of 88/100, signaling a strong overall performance across key metrics.Most notable signal: No insider transactions in the last 3 months, suggesting stability in management actions. Is ONTO Overvalued or Undervalued? The current price of Onto Innovation Inc ONTO is $278.02, which is significantly above the GF Value™ estimate of $185.60. This represents a 49.8% overvaluation, indicating that the stock may not provide a margin of safety for potential investors. The GF Valuation label classifies ONTO as significantly overvalued, which poses risks for those considering entry at this price level.

GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates. The substantial difference between the market price and the calculated intrinsic value suggests that ONTO shares may be subject to correction, especially if market sentiment shifts or if the company does not deliver on growth expectations.

How Does ONTO's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 129.9x 36.6x Forward P/E 39.0x - With a current P/E (TTM) of 129.9x, ONTO is trading at a level that is 255% above its 5-year median P/E of 36.6x, indicating that the stock is significantly overvalued compared to its historical valuation metrics. The forward P/E of 39.0x also suggests that even projected earnings do not justify the high current price, which aligns with the overvaluation indicated by the GF Value™ analysis.

What Does ONTO's GF Score™ Tell Us? Metric Rating GF Score™ 88 Financial Strength 8/10 Profitability 8/10 Growth 9/10 Valuation 5/10 Momentum 6/10 ONT's GF Score™ of 88/100 reflects a strong performance in several key areas, particularly in growth (9/10) and financial strength (8/10). However, the valuation rank of 5/10 indicates that the stock may not be attractively priced at its current level. The weakest area is the valuation, which is consistent with the concerns raised by the GF Value™ assessment.

What Are Insiders Doing with ONTO Stock? In the last three months, there have been no insider transactions reported for Onto Innovation Inc. This lack of activity could suggest that insiders are either confident in the company's current valuation and strategy or are waiting for clearer signals before making trades. When insiders are inactive, it may imply a wait-and-see approach regarding the company's future performance.

What This Means for Investors Based on the analysis of GF Value™, Onto Innovation Inc ONTO is currently considered overvalued. The significant gap between the current price and the intrinsic value suggests caution for potential investors who may be considering entry points at these elevated levels.

For the complete analysis, visit the Onto Innovation Inc ONTO stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.

Frequently Asked Questions What is ONTO's GF Score™?

ONTO's GF Score™ is 88/100, indicating that it has strong performance across key metrics, which has historically correlated with higher long-term returns.

Is ONTO overvalued or undervalued?

ONTO is considered overvalued, with a current price of $278.02 compared to a GF Value™ of $185.60, indicating a significant margin of overvaluation.

What is ONTO's P/E ratio?

ONTO's P/E (TTM) is 129.9x, which is significantly above its 5-year median P/E of 36.6x, confirming that the stock is trading at a much higher valuation compared to its historical norms.

This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].

Shares of Onto Innovation (ONTO - Free Report) have gained 0.2% over the past four weeks to close the last trading session at $274.76, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $352.14 indicates a potential upside of 28.2%.

The average comprises seven short-term price targets ranging from a low of $330.00 to a high of $370.00, with a standard deviation of $12.86. While the lowest estimate indicates an increase of 20.1% from the current price level, the most optimistic estimate points to a 34.7% upside. More than the range, one should note the standard deviation here, as it helps understand the variability of the estimates. The smaller the standard deviation, the greater the agreement among analysts.

While the consensus price target is highly sought after by investors, the ability and unbiasedness of analysts in setting price targets have long been questionable. And investors making investment decisions solely based on this tool would arguably do themselves a disservice.

However, an impressive consensus price target is not the only factor that indicates a potential upside in ONTO. This view is strengthened by the agreement among analysts that the company will report better earnings than what they estimated earlier. Though a positive trend in earnings estimate revisions doesn't give any idea as to how much the stock could surge, it has proven effective in predicting an upside.

Price, Consensus and EPS Surprise

Here's What You May Not Know About Analysts' Price TargetsAccording to researchers at several universities across the globe, a price target is one of many pieces of information about a stock that misleads investors far more often than it guides. In fact, empirical research shows that price targets set by several analysts, irrespective of the extent of agreement, rarely indicate where the price of a stock could actually be heading.

While Wall Street analysts have deep knowledge of a company's fundamentals and the sensitivity of its business to economic and industry issues, many of them tend to set overly optimistic price targets. Are you wondering why?

They usually do that to drum up interest in shares of companies that their firms either have existing business relationships with or are looking to be associated with. In other words, business incentives of firms covering a stock often result in inflated price targets set by analysts.

However, a tight clustering of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement about the direction and magnitude of a stock's price movement. While that doesn't necessarily mean the stock will hit the average price target, it could be a good starting point for further research aimed at identifying the potential fundamental driving forces.

That said, while investors should not entirely ignore price targets, making an investment decision solely based on them could lead to disappointing ROI. So, price targets should always be treated with a high degree of skepticism.

Here's Why There Could be Plenty of Upside Left in ONTOThere has been increasing optimism among analysts lately about the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher. And that could be a legitimate reason to expect an upside in the stock. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

Over the last 30 days, the Zacks Consensus Estimate for the current year has increased 3.5%, as two estimates have moved higher compared to no negative revision.

Moreover, ONTO currently has a Zacks Rank #2 (Buy), which means it is in the top 20% of more than 4,000 stocks that we rank based on four factors related to earnings estimates. Given an impressive externally-audited track record, this is a more conclusive indication of the stock's potential upside in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .

Therefore, while the consensus price target may not be a reliable indicator of how much ONTO could gain, the direction of price movement it implies does appear to be a good guide.

Key Takeaways ONTO topped Q1 expectations and sees 2026 revenue exceeding $1.3 billion on AI-driven demand.ONTO expects advanced packaging revenue to grow more than 50% in 2026 amid customer wins.ONTO plans a $710M Rigaku stake investment to expand metrology capabilities and licensing revenue. Shares of Onto Innovation, Inc. (ONTO - Free Report) have been one of the standout performers in the semiconductor equipment industry, delivering a remarkable 174.2% gain over the past year, outperforming the Zacks Nanotechnology industry’s growth of 171.5%. The company has outpaced the Zacks Computer and Technology sector and the S&P 500 composite’s growth of 42.8% and 26.3%, respectively.

Image Source: Zacks Investment Research

The stock’s impressive rally has been fueled by booming demand for AI infrastructure, advanced semiconductor packaging technologies, and the company’s expanding role in next-generation chip manufacturing. ONTO’s key competitors include KLA Corporation (KLAC - Free Report) , Camtek Ltd (CAMT - Free Report) and Nova Ltd. (NVMI - Free Report) . KLAC, CAMT and NVMI have grown 145.4%, 121.6% and 121%, respectively, in the same time frame.

Onto Innovation is a leading provider of process control, metrology, inspection and software solutions for semiconductor manufacturing. Its technologies help chipmakers improve yields, detect defects and optimize production across advanced logic, memory, advanced packaging, AI and high-performance computing applications. As chip manufacturing grows more complex, demand for Onto's precision tools continues to rise.

With such a strong run already behind it, investors are now asking a critical question: Does ONTO still have room to climb, or has the market already priced in most of the good news?

AI is Creating a Powerful Tailwind for ONTO StockOnto Innovation started 2026 strongly, surpassing expectations as demand for AI compute, advanced packaging and semiconductor process technologies continues to grow. First-quarter revenue hit $292 million, nearly 10% up sequentially, while second-quarter guidance of $320–$330 million indicates about 28% year-over-year growth. The company anticipates revenue to increase more than 15% sequentially in the second half of 2026, putting it on track to exceed $1.3 billion for the year. This momentum is fueled by customer expansions, rising adoption of new products and a strengthening order backlog.

Advanced Packaging to Become a Long-Term Growth EngineONTO continues to solidify its position in advanced packaging with several key customer wins and technology milestones. It achieved qualification for its Dragonfly G5 system at a leading 2.5D logic customer, with shipments progressing ahead of schedule. Its pipeline now comprises more than 15 applications across more than 10 customers, highlighting broad adoption potential. Advanced packaging revenue is projected to grow more than 50% in 2026, driven by increasing use cases in 2.5D logic, HBM and other advanced packaging technologies. Demand for solutions supporting bumps below six microns in height is rising, especially among OSAT customers, while growing interest in panel-level packaging and heterogeneous integration is expected to lead to a larger production ramp starting in 2027.

Advanced nodes business is also gaining momentum, led by expanding adoption of its Atlas G6 platform and new application opportunities. Following successful customer evaluations, Atlas G6 deployments are increasing across both logic and memory markets. The company also secured a new win in through-silicon via metrology, with shipments expected to begin in the second half of 2026. Growth is being driven by continued investment in advanced logic, improving DRAM demand and an anticipated recovery in the NAND market. As a result, Onto expects its advanced nodes segment to grow approximately 25% in 2026, outperforming broader WFE growth projections in the low-20% range.

Partnerships Strengthen ONTO’s Competitive PositionIt is strengthening its partnership with Rigaku Holdings Corporation through a planned $710 million investment for a 27% stake, expected to close in the second half of 2026. Funded primarily with cash on hand, the deal combines Rigaku’s X-ray expertise with ONTO’s optical metrology capabilities, expanding its technology portfolio. The partnership is expected to generate high-margin licensing revenue from Ai Diffract software, drive additional metrology tool sales and provide annual dividend income. Rigaku’s results will not be consolidated into Onto’s financial statements, though unrealized gains and losses from the investment will be reflected in other income.

Moreover, Onto Innovation's strategic investment in hybrid metrology is aimed at expanding its growth opportunities over the next three to six years. While the initiative is not expected to have a meaningful impact on revenue in 2026, it is positioned to create long-term value through potential interest income, high-margin licensing revenue and increased hybrid metrology system sales. Combined with expected dividend income, the investment is designed to strengthen Onto’s technology leadership and significantly broaden its medium- to long-term growth prospects.

Onto Innovation expects second-quarter revenues of $320–$330 million, implying about 10% upside to prior estimates at the midpoint and 28% year-over-year growth. Despite headwinds from higher material and fuel costs, along with increased R&D and service investments, it expects continued margin expansion. While monitoring macro and company-specific cost pressures, Onto remains confident it can expand gross margins by at least 50 basis points in the third and fourth quarters each and exit the year with an operating margin above 30%.

Image Source: Zacks Investment Research

Despite its strong outlook, ONTO is not without risks. The company generates a significant portion of its revenue from large semiconductor manufacturers, making it sensitive to changes in their capital spending plans. Any slowdown in customer investments could affect revenue growth and order trends. Additionally, Onto operates in a highly competitive market alongside larger industry players with greater resources and global reach. To maintain its competitive position, the company must continue investing in innovation and advancing its technology leadership. The company is weighed down by tariffs, mostly from imported components that make up nearly 90% of its costs, along with added pressure from outbound tariffs.

Positive Estimate Revision Trend for ONTOEarnings estimates for ONTO have moved up for both 2026 and 2027 over the past 60 days.

Image Source: Zacks Investment Research

Valuation ConcernsAfter rising 174% in a year, the stock now trades at a significantly higher valuation multiple than it did previously. In terms of forward price/earnings, ONTO’s shares are trading at 34.12X, higher than the industry’s 6.6X.

Image Source: Zacks Investment Research

KLAC, CAMT and NVMI are trading at multiples of 43.59X, 47.39X and 48.9X, respectively.

Does ONTO Have More Room to Run?The company sits at the intersection of multiple powerful trends like AI, advanced packaging demand, HBM, semiconductor process complexity and data center expansion. These trends are likely to continue in the long run. However, as valuations rise, stock performance will increasingly depend on continued earnings growth and successful execution.

For long-term investors seeking exposure to AI-driven semiconductor infrastructure, Onto Innovation remains a compelling bet. The stock may experience periods of volatility following its massive run-up, but its strong competitive position and exposure to some of the industry's fastest-growing segments suggest the company could still have additional room to run over the coming years.

Currently boasting a Zacks Rank #1 (Strong Buy), ONTO seems to be a value addition for your portfolio.  You can see the complete list of today’s Zacks #1 Rank stocks here.