In the dynamic world of semiconductors, two companies stand out: ASML Holding N.V. and Onto Innovation Inc. Both firms are pivotal players in the semiconductor equipment sector, focusing on innovative solutions for chipmakers. ASML is renowned for its advanced lithography systems, while Onto Innovation specializes in process control tools and metrology. As we delve into their strategies and market positions, I aim to help you identify which of these companies presents the most compelling investment opportunity.
Table of contents
Company Overview
ASML Overview
ASML Holding N.V. stands at the forefront of the semiconductor industry, specializing in advanced equipment systems that enable chipmakers to produce cutting-edge microchips. Founded in 1984 and headquartered in Veldhoven, the Netherlands, ASML has revolutionized semiconductor manufacturing with its pioneering lithography technologies, including extreme ultraviolet (EUV) lithography systems. These innovations are critical for producing the latest semiconductor nodes and technologies, positioning ASML as a vital partner for major chip manufacturers worldwide. With a market capitalization of approximately $411B, ASML is a key player in the tech sector, continuously pushing the boundaries of what’s achievable in semiconductor fabrication.
Onto Innovation Overview
Onto Innovation Inc. is a leading provider of process control tools and software for the semiconductor industry, emphasizing macro defect inspection and optical metrology. Established in 1940 and based in Wilmington, Massachusetts, Onto Innovation serves a diverse range of customers, including manufacturers of silicon wafers and advanced packaging devices. The company’s solutions enhance yield management and improve manufacturing processes, making it indispensable in the competitive landscape of semiconductor production. With a market cap of around $7B, Onto Innovation is recognized for its innovative approach and commitment to quality in the semiconductor domain.
Key similarities and differences
Both ASML and Onto Innovation operate within the semiconductor sector, focusing on advanced technologies that enhance manufacturing efficiency. However, ASML primarily specializes in lithography equipment essential for chip production, while Onto Innovation offers process control and inspection tools to improve yield management. This distinction highlights ASML’s role in the initial stages of semiconductor fabrication, contrasted with Onto’s emphasis on quality assurance throughout the manufacturing process.
Income Statement Comparison
The following table compares the most recent income statements for ASML Holding N.V. and Onto Innovation Inc., highlighting key financial metrics that can inform investment decisions.
| Metric | ASML Holding N.V. | Onto Innovation Inc. |
|---|---|---|
| Market Cap | 410.83B | 7.02B |
| Revenue | 28.26B | 0.99B |
| EBITDA | 10.12B | 0.25B |
| EBIT | 9.21B | 0.19B |
| Net Income | 7.57B | 0.20B |
| EPS | 19.25 | 4.09 |
| Fiscal Year | 2024 | 2024 |
Interpretation of Income Statement
In 2024, ASML demonstrates robust growth with a revenue increase to 28.26B and a net income of 7.57B, reflecting a strong market position in the semiconductor industry. Onto Innovation, while smaller, also shows promising performance with revenue at 0.99B and net income of 0.20B, indicating growth in its niche. Both companies maintain stable margins, but ASML’s significantly higher EBITDA and net income suggest it capitalizes on economies of scale effectively. Overall, ASML’s performance indicates a steady upward trajectory, while Onto shows potential for future growth, albeit at a slower pace.
Financial Ratios Comparison
Below is a comparative table showing the most recent Revenue and Ratios for ASML Holding N.V. (ASML) and Onto Innovation Inc. (ONTO).
| Metric | ASML | ONTO |
|---|---|---|
| ROE | 40.98% | 10.47% |
| ROIC | 24.93% | 8.74% |
| P/E | 34.77 | 41.76 |
| P/B | 14.25 | 4.37 |
| Current Ratio | 1.53 | 8.69 |
| Quick Ratio | 0.95 | 7.00 |
| D/E | 0.27 | 0.01 |
| Debt-to-Assets | 10.28% | 1.02% |
| Interest Coverage | 56.20 | N/A |
| Asset Turnover | 0.58 | 0.47 |
| Fixed Asset Turnover | 3.91 | 7.16 |
| Payout Ratio | 33.84% | 0% |
| Dividend Yield | 0.97% | 0% |
Interpretation of Financial Ratios
When analyzing these ratios, ASML displays robust performance indicators, particularly in ROE and ROIC, suggesting effective capital utilization. However, its P/E and P/B ratios indicate a premium valuation, which could imply overvaluation risks. Conversely, ONTO shows strong liquidity with a high current and quick ratio, but lower profitability ratios may raise concerns about growth potential. Overall, careful consideration of ASML’s valuation and ONTO’s performance metrics is essential for informed investment decisions.
Dividend and Shareholder Returns
ASML Holding N.V. pays dividends with a payout ratio of approximately 33.8%, reflecting a consistent dividend per share trend. The annual dividend yield stands at around 0.97%, supported by strong free cash flow, indicating sustainable distributions. In contrast, Onto Innovation Inc. does not pay dividends, focusing instead on reinvestment for growth and R&D. However, it engages in share buybacks, which could enhance shareholder value in the long run. Overall, ASML’s strategy seems more aligned with sustainable value creation compared to Onto’s growth-focused approach.
Strategic Positioning
ASML Holding N.V. dominates the semiconductor equipment market with a significant market share, particularly in extreme ultraviolet lithography systems, which are crucial for advanced chip manufacturing. In contrast, Onto Innovation Inc. offers competitive process control tools and metrology solutions, though it holds a smaller market share overall. The pressure from emerging technologies and competitors is intense, necessitating continuous innovation from both companies to maintain their positions in a rapidly evolving landscape.
Stock Comparison
In the past year, ASML Holding N.V. and Onto Innovation Inc. have demonstrated distinct stock price movements, showcasing significant trends in trading dynamics indicative of their respective market positions.
Trend Analysis
ASML Holding N.V. (ASML): Over the past year, ASML’s stock has experienced a remarkable price increase of 50.71%, indicating a bullish trend. The stock has shown acceleration in its upward movement, with notable highs reaching 1085.26 and lows of 605.55. This trend demonstrates a standard deviation of 126.46, suggesting a relatively high level of volatility. Recent performance from September 14, 2025, to November 30, 2025, indicates a strong price rise of 30.24% with a standard deviation of 67.72, further affirming the bullish sentiment.
Onto Innovation Inc. (ONTO): Over the same period, ONTO’s stock has increased by 5.12%, also reflecting a bullish trend. This increase signifies steady growth, with an acceleration noted in its price movement. The stock reached a high of 233.14 and a low of 88.5, operating within a standard deviation of 42.33. For the recent period from September 14, 2025, to November 30, 2025, ONTO has recorded a price change of 29.0% with a lower standard deviation of 9.18, indicating lesser volatility and a stable uptrend.
Both companies exhibit strong buyer dominance, with ASML showing a buyer percentage of 53.09% and ONTO at 55.23%. This suggests a positive market sentiment towards both stocks, making them noteworthy candidates for investors looking to enhance their portfolios.
Analyst Opinions
Recent recommendations for ASML Holding N.V. (ASML) suggest a “Buy” rating, with analysts highlighting strong return on equity and assets. Analysts emphasize ASML’s solid growth potential in the semiconductor sector, maintaining a B+ rating. In contrast, Onto Innovation Inc. (ONTO) has received a “Hold” rating, reflecting moderate growth prospects and a B rating overall. The consensus for ASML is bullish, while ONTO suggests cautious optimism. I recommend monitoring both stocks closely for future developments.
Stock Grades
I have analyzed the latest stock grading data for two companies: ASML Holding N.V. and Onto Innovation Inc. Here’s what the verifiable grading companies have to say about these stocks.
ASML Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Wells Fargo | maintain | Overweight | 2025-10-16 |
| Susquehanna | maintain | Positive | 2025-10-10 |
| JP Morgan | maintain | Overweight | 2025-10-06 |
| UBS | upgrade | Buy | 2025-09-05 |
| Wells Fargo | maintain | Overweight | 2025-07-08 |
| Jefferies | downgrade | Hold | 2025-06-26 |
| Barclays | downgrade | Equal Weight | 2025-06-03 |
| Wells Fargo | maintain | Overweight | 2025-04-17 |
| Susquehanna | maintain | Positive | 2025-04-17 |
| Raymond James | maintain | Strong Buy | 2025-04-16 |
Onto Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| B. Riley Securities | maintain | Buy | 2025-11-18 |
| Needham | maintain | Buy | 2025-11-18 |
| Evercore ISI Group | maintain | Outperform | 2025-11-05 |
| Oppenheimer | maintain | Outperform | 2025-10-14 |
| Stifel | maintain | Hold | 2025-10-13 |
| B. Riley Securities | maintain | Buy | 2025-10-10 |
| Jefferies | upgrade | Buy | 2025-09-23 |
| B. Riley Securities | maintain | Buy | 2025-08-08 |
| Benchmark | maintain | Buy | 2025-08-08 |
| Cantor Fitzgerald | maintain | Neutral | 2025-06-24 |
Overall, ASML maintains a strong position with consistent “Overweight” ratings from multiple firms, indicating a stable outlook. Onto Innovation also shows positive sentiment with several “Buy” ratings, reflecting confidence in its growth potential. It’s essential to monitor these trends as they can influence future investment decisions.
Target Prices
The consensus target prices from analysts for ASML Holding N.V. and Onto Innovation Inc. suggest optimistic growth potential for both companies.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| ASML Holding N.V. | 1200 | 800 | 1045 |
| Onto Innovation Inc. | 180 | 120 | 153.33 |
For ASML, the target consensus of 1045 is slightly lower than the current price of 1059.92, indicating a stable outlook. Meanwhile, Onto Innovation’s consensus of 153.33 is above its current price of 143.16, suggesting potential upside.
Strengths and Weaknesses
The following table highlights the strengths and weaknesses of ASML Holding N.V. and Onto Innovation Inc., two key players in the semiconductor industry.
| Criterion | ASML | Onto Innovation |
|---|---|---|
| Diversification | High | Moderate |
| Profitability | High (27% Net) | Moderate (20% Net) |
| Innovation | Strong | Moderate |
| Global presence | Extensive | Regional |
| Market Share | Dominant | Niche |
| Debt level | Low (10%) | Very Low (1%) |
Key takeaways show that ASML excels in profitability, market share, and global presence, making it a robust investment choice. Onto Innovation, while innovative, is less diversified and has a smaller market presence.
Risk Analysis
In the following table, I outline the risks associated with ASML Holding N.V. and Onto Innovation Inc., which can help investors assess potential challenges in their investments.
| Metric | ASML Holding N.V. | Onto Innovation Inc. |
|---|---|---|
| Market Risk | High | Moderate |
| Regulatory Risk | Moderate | Low |
| Operational Risk | Moderate | High |
| Environmental Risk | Low | Moderate |
| Geopolitical Risk | High | Moderate |
Both companies face significant market risk due to their reliance on the semiconductor industry, which is influenced by global demand fluctuations. ASML is particularly exposed to geopolitical tensions, especially regarding technology exports. Investors should remain vigilant about these factors.
Which one to choose?
When comparing ASML Holding N.V. (ASML) and Onto Innovation Inc. (ONTO), several metrics highlight ASML’s stronger position. ASML boasts a higher gross profit margin of 51.3% compared to ONTO’s 52.2%, yet its net profit margin of 26.8% surpasses ONTO’s 20.4%. ASML’s robust return on equity (41%) and lower debt-to-equity ratio (0.27) indicate solid financial health, while its stock trend remains bullish with a 50.7% price increase over the past year. In contrast, ONTO has shown slower growth with a 5.1% increase in the same period and a higher price-to-earnings ratio of 61.8.
For growth-oriented investors, ASML appears favorable due to its consistent profitability and strong analyst ratings (B+). Conversely, risk-averse investors may find ONTO attractive for its lower volatility and high current ratio (8.69), indicating robust liquidity.
However, both companies face industry risks, including market dependence and competition in the semiconductor sector.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of ASML Holding N.V. and Onto Innovation Inc. to enhance your investment decisions:
