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