Onto Innovation (ONTO) Stock Forecast & Price Target

Onto Innovation is well positioned to outgrow WFE because GenAI-driven demand is lifting advanced packaging, HBM, and leading-edge logic investment, with WFE expected to grow ~30% in 2026 and >35% in 2027 while ONTO’s systems revenue is modeled to outpace it through 2028. Its Dragonfly and Atlas platforms are gaining share by solving increasingly difficult process control problems, as advanced packaging is on track for ~80% growth this year and advanced nodes reached a record ~$120M in Q2 2026, while management also sees gross margin expansion from 57.0% in 2Q26 toward 58.6% in FY27E. The company’s recurring software and services layer, net cash balance sheet, and minimal China exposure add resilience and visibility, making the risk/reward attractive.

Onto Innovation is viewed negatively because its revenue base remains highly exposed to cyclical semiconductor spending, with China still near 4% of F2Q26 revenue but broader foundry demand tied to TSMC, Samsung, and Intel leaving earnings vulnerable to capex cuts. The thesis is further pressured by delayed adoption in advanced packaging, panel-level packaging, and silicon photonics, while competitive threats from KLA and ASML could erode share in key inspection and metrology niches. Although Semilab added $46.1 million in H1 2026 and implied a $90-100 million annualized run-rate, weakening EV demand in its power semiconductor business and the stock’s 2.4 beta suggest volatile, downside-prone fundamentals.