Onto Innovation Inc. (ONTO): A Bull Case Theory

We came crossed a bullish thesis connected Onto Innovation Inc. connected Valueinvestorsclub.com by anonymous.user. In this article, we volition summarize the bulls’ thesis connected ONTO. Onto Innovation Inc.'s stock was trading astatine $213.70 arsenic of January 28th. ONTO’s trailing and guardant P/E were 58.72 and 32.47 respectively according to Yahoo Finance.

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Onto Innovation (ONTO) represents a highly compelling concern accidental with imaginable 80–100%+ upside implicit the adjacent 1–2 years, driven by a convergence of secular AI demand, cyclical semiconductor inflection, and operational execution. ONTO produces precocious semiconductor superior equipment, including ample metrology and inspection tools captious to spot production, peculiarly successful the back-end precocious packaging stage.

The institution is connected the verge of shipping and qualifying its flagship Dragonfly 5 strategy for TSMC, which is expected to reconstruct ONTO’s stock mislaid to KLA during the NVDA Blackwell ramp, seizure 25–100% of displaced measurement starting successful mid-2026, and thrust important gross borderline expansion. This milestone, combined with affirmative statement revisions and the beardown 4Q backlog, positions ONTO to bushed estimates and reclaim its AI-beneficiary multiple, perchance delivering 40–50% banal upside.

Further upside is supported by a supply-constrained semiconductor situation wherever AI-driven request for precocious bandwidth representation and precocious packaging is projected to much than double, creating a supercycle that straight benefits ONTO.

The planned Semilab acquisition adds $130 cardinal successful annualized revenue, is instantly EPS and borderline accretive, and strengthens ONTO’s capabilities successful materials characterization and wafer contamination monitoring, contributing an further 10%+ EPS upside. ONTO is insulated from China-related risks and trades astatine a trough aggregate portion peers are astatine peak, creating a favorable rotation opportunity.

Additional catalysts see representation request acceleration, imaginable front-end stock gains, and continued AI-related spending successful the semiconductor ecosystem, which could further assistance EPS and valuations. With execution connected the caller machine, Semilab integration, and AI-driven tailwinds, ONTO is positioned for multi-year gross and EPS growth, with 2027 EPS of $9–$10 implying 90%+ upside astatine normalized 30x multiple, highlighting a uncommon asymmetric risk/reward profile.

Previously, we covered a bullish thesis on KLA Corporation (KLAC) by Quality Equities successful January 2025, which highlighted the company’s enactment successful semiconductor process control, AI-driven demand, and TSMC’s elevated superior expenditures. KLAC’s banal terms has appreciated by astir 114.82% since our sum due to beardown manufacture tailwinds. Anonymous.user shares a akin thesis but emphasizes Onto Innovation’s (ONTO) imaginable to regain TSMC share, payment from back-end precocious packaging, and recognize upside from the Semilab acquisition.