Onto Innovation (ONTO) is back in focus after reporting record quarterly revenue in its semiconductor process control business and expanding its partnership with Rigaku Holdings, including a substantial minority stake tied to next generation X ray solutions.

Those record results and the Rigaku partnership have arrived alongside strong stock momentum, with a 30 day share price return of 6% and a year to date share price return of 67.17%. The 1 year total shareholder return of 182.82% points to substantial gains for longer term holders.

If Onto Innovation’s recent move has you thinking about where else growth in chip infrastructure might show up next, this could be a good moment to scan 41 AI infrastructure stocks

With record revenue, a new Rigaku partnership and shares already up sharply, the key question now is simple: is Onto Innovation still priced for upside, or is the market already baking in most of the future growth?

Most Popular Narrative: 1.2% Undervalued

Onto Innovation’s most followed narrative pegs fair value at about $280.71, only slightly above the last close of $277.28. This frames the current debate around whether the recent rally already reflects the key growth drivers.

The accelerating adoption of AI packaging and advanced 2.5D/3D logic architectures is driving a major step up in demand for Onto Innovation's next-generation Dragonfly systems, with strong customer pull and new applications expanding both revenue and potential gross margin through higher ASPs and increased market share within leading-edge chip production.

Curious what revenue runways, margin lift and future earnings power need to look like to support that fair value. The full narrative lays out a precise growth path, calibrated discount rate and a richer future earnings multiple that together explain why fair value lands where it does.

Result: Fair Value of $280.71 (UNDERVALUED)

However, this story can change quickly if expected customer demand in AI packaging and advanced nodes softens, or if geopolitical and tariff risks start to bite harder.

Another Lens On Value: Earnings Multiple Sends A Different Signal

The analyst narrative sees Onto Innovation as about 1.2% undervalued, yet the current P/E of 129.6x tells a different story. It is roughly double the US Semiconductor industry average of 64.8x, above the peer average of 79.7x, and well above a fair ratio of 58.5x. That gap points to real valuation risk if sentiment cools. How comfortable are you paying this kind of premium for the growth story?

Next Steps

Given the mixed signals on valuation and growth, it may be useful to examine the details yourself and promptly form your own view based on the 2 key rewards and 2 important warning signs

Looking for more investment ideas?

If Onto Innovation already sits in your portfolio or watchlist, it is worth widening the opportunity set so you are not relying on a single story.

• Target potential mispricings by scanning 1 high quality undervalued stocks that combine quality fundamentals with prices that may not fully reflect them.
• Build a steadier income stream by reviewing 13 dividend fortresses that pair higher yields with an emphasis on resilience.
• Prioritize capital preservation by focusing on 67 resilient stocks with low risk scores that rank well on financial strength and lower overall risk scores.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.