Onto Innovation ONTO expects to deliver more than 30% revenue growth in 2026, putting the number above $1.3 billion, driven by strong demand tied to artificial intelligence (“AI”) and advanced semiconductor technologies. Management noted that there is “insatiable end market demand” for high-performance computing and supporting process technologies.
Strong start to the year lends credibility to this forecast. For the first quarter of 2026, revenues were $291.9 million, up 9.5% year over year and nearly 10% sequentially. Customer adoption of the company’s latest systems, including the Dragonfly G5 and Atlas G6 platforms, has been promising.
Continued growth is expected in the second quarter, with revenues projected between $320 million and $330 million, representing roughly 28% year-over-year growth at the midpoint. Management expects 15% sequential growth in the second half of the year, supported by expanding backlog and increasing uptake of new products.
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Advanced packaging is expected to grow more than 50% in 2026, while the advanced nodes business is projected to expand nearly 25%, benefiting from strong DRAM demand and increased adoption of the Atlas G6 platform. These segment-level tailwinds reinforce the broader company growth outlook.
Over the long term, strategic initiatives such as its collaboration with Rigaku bode well. The company is acquiring a 27% stake for about $710 million, with the deal expected to close in the second half of 2026. The partnership expands Onto’s access to advanced X-ray technologies, enhancing its semiconductor inspection and metrology capabilities, and includes the right to appoint a board member. Along with its earlier acquisition of Semilab USA, the move underscores Onto’s strategy to broaden its process control ecosystem and support long-term growth.
However, execution will be key. The company acknowledged headwinds from higher material, fuel and shipping costs, along with investments in R&D.
Mapping the Competitive Terrain
KLA Corporation KLAC reported third-quarter fiscal 2026 revenues of $3.42 billion, up 11% year over year. Higher investments in foundry/logic and high-bandwidth memory are emerging as key tailwinds. KLAC estimates wafer-fab equipment spending to exceed $140 billion in 2026, with 2027 growth expected to be even stronger than 2026.
KLA expects sequential revenue increase throughout 2026 and forecasts high-teens year-over-year growth for the semiconductor process-control systems business, which is expected to rise more than 20%. The company also emphasized strong momentum in advanced packaging. KLAC now expects advanced packaging process-control revenues to be nearly $1 billion in 2026, from around $635 million in 2025.
Nova Ltd NVMI first-quarter 2026 revenues rose 10% year over year to $235.3 million. Memory was a key contributor, with revenues from advanced DRAM applications accounting for roughly two-thirds of its memory business. Nova also added that it witnessed strong adoption of its Metrion platform across advanced DRAM and 3D NAND, alongside record sales for the chemical metrology products.
For the second quarter, Nova guided revenues to $245-$255 million. The company said it remains focused on investing in R&D, manufacturing capacity and infrastructure to support anticipated customer demand.
ONTO Price Performance, Valuation and Estimates
ONTO’s shares have soared 73.7% year to date, underperforming the Zacks Nanotechnology industry’s growth of 79.1%.
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In terms of forward price/earnings, ONTO’s shares are trading at 35.89X, higher than the industry’s 7.12X.
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The Zacks Consensus Estimate for ONTO has moved up for both 2026 and 2027 over the past 60 days.
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Onto Innovation currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).