Onto Innovation post-earnings selloff feels ‘too harsh,’ says Stifel

Stifel reiterated a Buy rating and $270 price target on Onto Innovation (ONTO), noting that the stock has sold off following the company’s Q3 report. The reaction being down 10% feels “too harsh” given a still strong fundamental and better relative setup for the company next year, the analyst tells investors in a research note. The firm said it understands concerns around near-term high bandwidth memory visibility, however it believes the upside strength of TSMC (TSM) chip-on-wafer-on-substrate expansion plans remains underappreciated. Given the company’s differentiated AI packaging exposure and stronger growth prospects, Stifel believes 20-30x is an appropriate range for the stock and would be adding to positions at current levels.