Jefferies Downgrades Onto Innovation (ONTO) to Hold, Cuts PT

On Tuesday, May 20, Jefferies downgraded Onto Innovation Inc. (NYSE:ONTO) to “Hold” from “Buy” and reduced the price target to $110 from $135. This adjustment reflects concerns over the correction in the AI Packaging market, which is expected to continue through 2026. 2027 could be an important year for the company to prove it can win back market share.

The Jefferies analyst noted that it is not clear when Onto Innovation Inc. (NYSE:ONTO) will be resuming double-digit growth. The report also highlighted the potential for a lasting impact on the company’s opportunity in the CoWoS (Chip on Wafer on Substrate) market. This market segment might be permanently affected.

Onto Innovation Inc. (NYSE:ONTO) is an American company that operates in the semiconductor equipment and services industry. It continues to navigate a shifting landscape as the demand for AI packaging solutions is going through a period of correction.

While we acknowledge the potential of ONTO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ONTO and that has a 100x upside potential, check out our report about the cheapest AI stock.

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Disclosure: None.