ONTO

Onto Innovation is a financially pristine semiconductor metrology and inspection vendor — zero long-term debt, $346M cash (+62.5%), and a fortress 0.13x liabilities/equity ratio. The franchise is real, levered to advanced packaging and metrology for AI chips and advanced nodes, with revenue heavily concentrated in Taiwan (32%) and South Korea (28%). But the FY2026 (fiscal year ended January 3, 2026) results show the cyclical cracks: revenue grew only 1.8% to $1.01B while net income fell 32.2% to $137M and diluted EPS dropped 31.5% to $2.78. The MD&A attributes the systems softness to fewer inspection units shipped for AI advanced-packaging, and gross margin compressed from 52.2% to 49.7% on restructuring and excess/obsolete inventory write-downs.

Read the full thesis with Pro →