Astera Labs, Inc. (ALAB) and Onto Innovation Inc. (ONTO) are two key players in the semiconductor industry, each driving innovation in connectivity solutions and process control tools, respectively. While Astera Labs focuses on cloud and AI infrastructure connectivity, Onto Innovation specializes in advanced manufacturing metrology and inspection technologies. This article will analyze both companies to help you identify which presents the most compelling investment opportunity in 2026.
Table of contents
Companies Overview
I will begin the comparison between Astera Labs and Onto Innovation by providing an overview of these two companies and their main differences.
Astera Labs Overview
Astera Labs, Inc. designs and sells semiconductor-based connectivity solutions aimed at cloud and AI infrastructure. Founded in 2017 and based in Santa Clara, California, the company’s Intelligent Connectivity Platform integrates data, network, and memory connectivity products on a software-defined architecture. Astera Labs focuses on enabling scalable, high-performance infrastructure for cloud and AI applications, positioning itself as an innovator within the semiconductor sector.
Onto Innovation Overview
Onto Innovation Inc., established in 1940 and headquartered in Wilmington, Massachusetts, develops process control tools for semiconductor manufacturing, including macro defect inspection, optical metrology, lithography systems, and analytical software. It serves a broad array of industries, from semiconductors to advanced packaging and various scientific applications, offering integrated solutions for process control and yield management. Onto Innovation operates globally within the semiconductor technology space.
Key similarities and differences
Both companies operate in the semiconductor industry with a focus on technology innovation. Astera Labs specializes in connectivity solutions for cloud and AI infrastructure, while Onto Innovation provides process control and inspection tools for semiconductor manufacturing. Astera Labs is a younger firm with a platform-centric approach, whereas Onto Innovation has a longer history and a diverse product portfolio serving multiple end markets in semiconductor production.
Income Statement Comparison
The table below presents a side-by-side comparison of key income statement metrics for Astera Labs, Inc. Common Stock (ALAB) and Onto Innovation Inc. (ONTO) for the fiscal year 2024.
| Metric | Astera Labs, Inc. Common Stock (ALAB) | Onto Innovation Inc. (ONTO) |
|---|---|---|
| Market Cap | 29.5B | 10.7B |
| Revenue | 396.3M | 987.3M |
| EBITDA | -113.0M | 249.4M |
| EBIT | -116.1M | 187.1M |
| Net Income | -83.4M | 201.7M |
| EPS | -0.64 | 4.09 |
| Fiscal Year | 2024 | 2024 |
Income Statement Interpretations
Astera Labs, Inc. Common Stock
Astera Labs experienced significant revenue growth from 2022 to 2024, increasing nearly 4-fold to $396M in 2024. Despite this, net income remained negative, with a loss of $83M in 2024, though net margin improved to -21%. Gross margin was strong at 76.4%, but operating expenses grew in line with revenue, pushing EBIT margin deeper into negative territory at -29.3%. The latest year showed rapid top-line expansion but persistent operating losses.
Onto Innovation Inc.
Onto Innovation demonstrated steady revenue growth over 2020-2024, reaching $987M in 2024 with a favorable 21% increase year-over-year. Net income rose substantially to $202M in 2024, supporting a robust net margin of 20.4%. Gross margin remained solid at 52.2%, while EBIT margin improved to 19%. Operational efficiencies and margin expansions contributed to strong profitability gains in the most recent year, reflecting consistent financial health.
Which one has the stronger fundamentals?
Onto Innovation shows stronger fundamentals with consistent positive net income, improving margins, and sustained revenue growth. Astera Labs, while demonstrating rapid revenue expansion and favorable gross margins, continues to face significant net losses and negative EBIT margins, indicating ongoing profitability challenges. Overall, Onto’s income statement reflects more stable and favorable financial performance.
Financial Ratios Comparison
The table below presents key financial ratios for Astera Labs, Inc. (ALAB) and Onto Innovation Inc. (ONTO) based on their most recent fiscal year data.
| Ratios | Astera Labs, Inc. (ALAB) 2024 | Onto Innovation Inc. (ONTO) 2024 |
|---|---|---|
| ROE | -8.65% | 10.47% |
| ROIC | -11.97% | 8.77% |
| P/E | -208.41 | 41.76 |
| P/B | 18.02 | 4.37 |
| Current Ratio | 11.71 | 8.69 |
| Quick Ratio | 11.21 | 7.00 |
| D/E (Debt-to-Equity) | 0.0013 | 0.0079 |
| Debt-to-Assets | 0.12% | 0.72% |
| Interest Coverage | 0 | 0 |
| Asset Turnover | 0.38 | 0.47 |
| Fixed Asset Turnover | 11.12 | 7.16 |
| Payout Ratio | 0 | 0 |
| Dividend Yield | 0 | 0 |
Interpretation of the Ratios
Astera Labs, Inc. Common Stock
Astera Labs shows a majority of unfavorable ratios, including negative net margin (-21.05%) and return on equity (-8.65%), indicating profitability and efficiency challenges. Its high current ratio (11.71) is flagged unfavorable, possibly reflecting excess liquidity. The company does not pay dividends, likely due to ongoing investments and negative returns, focusing instead on growth and innovation.
Onto Innovation Inc.
Onto Innovation presents a more balanced ratio profile, with a favorable net margin of 20.43% and positive returns on equity (10.47%) and invested capital (8.77%). However, it faces unfavorable valuation ratios like a PE of 41.76. The company also does not pay dividends, which may reflect reinvestment priorities or growth strategies, supported by solid cash flow coverage.
Which one has the best ratios?
Onto Innovation offers a more favorable and balanced financial ratio profile with positive profitability and return metrics, while Astera Labs faces multiple unfavorable indicators, especially in profitability and capital efficiency. Onto’s neutral global evaluation contrasts with Astera Labs’ unfavorable overall rating, suggesting stronger financial health in Onto’s case.
Strategic Positioning
This section compares the strategic positioning of Astera Labs (ALAB) and Onto Innovation (ONTO) in terms of market position, key segments, and exposure to technological disruption:
Astera Labs, Inc. Common Stock (ALAB)
- Emerging player in semiconductors with $29.5B market cap; faces competitive pressure from established peers.
- Focused on semiconductor connectivity solutions for cloud and AI infrastructure; driven by product sales of $393M.
- Exposure to disruption through software-defined architectures in connectivity, targeting scalable cloud and AI infrastructure.
Onto Innovation Inc. (ONTO)
- Established semiconductor equipment maker with $10.7B market cap; competes in specialized process control tools.
- Diversified segments including systems/software ($850M), parts ($77M), services ($60M); driven by process control tools.
- Exposure to disruption in process control and analytical software for semiconductor manufacturing and packaging.
Astera Labs vs Onto Innovation Positioning
ALAB pursues a concentrated strategy focused on connectivity solutions for cloud and AI, while ONTO offers diversified process control tools and software. ALAB’s approach targets emerging infrastructure needs; ONTO’s broad product mix serves multiple semiconductor manufacturing stages.
Which has the best competitive advantage?
Both companies are currently shedding value with slightly unfavorable moats; however, both show growing ROIC trends, indicating improving profitability despite present challenges in capital efficiency.
Stock Comparison
The past year showed significant bullish trends for both Astera Labs, Inc. (ALAB) and Onto Innovation Inc. (ONTO), with ALAB’s price surging sharply but decelerating recently, while ONTO experienced steady acceleration and a strong recent rally.
Trend Analysis
Astera Labs, Inc. (ALAB) displayed a strong bullish trend over the past 12 months with a 149.21% price increase, though recent months show a mild downturn of -6.55%, indicating short-term deceleration amid high volatility.
Onto Innovation Inc. (ONTO) also maintained a bullish trajectory with a 22.07% rise over the year, coupled with accelerating momentum and a notable recent gain of 61.42%, supported by a buyer-dominant volume trend.
Comparing the two, ALAB delivered the highest market performance over the full period, despite recent slight weakness, while ONTO’s stock demonstrated consistent acceleration and stronger buyer dominance in recent trading.
Target Prices
The current analyst consensus on target prices reflects positive expectations for the semiconductor companies Astera Labs, Inc. and Onto Innovation Inc.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Astera Labs, Inc. Common Stock | 225 | 165 | 202.14 |
| Onto Innovation Inc. | 200 | 160 | 178 |
Analysts expect Astera Labs to rise from its current price of 174.45 USD toward the consensus target of 202.14 USD, indicating potential upside. Onto Innovation’s consensus target of 178 USD is below its current price of 217.85 USD, suggesting a potential downside or overvaluation risk.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Astera Labs, Inc. Common Stock (ALAB) and Onto Innovation Inc. (ONTO):
Rating Comparison
ALAB Rating
- Rated B, considered very favorable overall.
- Discounted Cash Flow Score is 1, a very unfavorable indication of valuation.
- Return on Equity Score is 4, reflecting a favorable profit generation from equity.
- Return on Assets Score is 5, a very favorable use of assets to generate earnings.
- Debt To Equity Score is 4, signifying favorable financial stability.
- Overall Score is 3, a moderate summary of financial standing.
ONTO Rating
- Rated B+, also very favorable overall.
- Discounted Cash Flow Score is 3, indicating a moderate valuation outlook.
- Return on Equity Score is 3, showing moderate efficiency in generating profits.
- Return on Assets Score is 4, favorable asset utilization.
- Debt To Equity Score is 4, also indicating favorable balance sheet strength.
- Overall Score is 3, similarly moderate in overall assessment.
Which one is the best rated?
ONTO holds a slightly higher overall rating (B+) compared to ALAB’s B. While ALAB scores better on ROE and ROA, ONTO has a more favorable discounted cash flow score, balancing their moderate overall scores equally.
Scores Comparison
The company scores comparison based on Altman Z-Score and Piotroski Score is as follows:
ALAB Scores
- Altman Z-Score: 136.88, indicating a safe zone with very low bankruptcy risk.
- Piotroski Score: 6, classified as average financial strength.
ONTO Scores
- Altman Z-Score: 34.16, indicating a safe zone with low bankruptcy risk.
- Piotroski Score: 4, classified as average financial strength.
Which company has the best scores?
ALAB has a significantly higher Altman Z-Score compared to ONTO, suggesting stronger financial stability. Both companies have average Piotroski Scores, with ALAB scoring slightly higher than ONTO.
Grades Comparison
Here is a comparison of the recent grades assigned to Astera Labs, Inc. and Onto Innovation Inc.:
Astera Labs, Inc. Grades
The following table summarizes the latest ratings and grade changes from verified financial institutions for Astera Labs:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Northland Capital Markets | Maintain | Outperform | 2025-12-09 |
| Northland Capital Markets | Upgrade | Outperform | 2025-11-17 |
| Stifel | Maintain | Buy | 2025-11-05 |
| Morgan Stanley | Maintain | Overweight | 2025-11-05 |
| Roth Capital | Maintain | Buy | 2025-11-05 |
| Needham | Maintain | Buy | 2025-11-05 |
| JP Morgan | Maintain | Overweight | 2025-11-05 |
| TD Cowen | Maintain | Hold | 2025-11-05 |
| Barclays | Downgrade | Equal Weight | 2025-10-20 |
| Stifel | Maintain | Buy | 2025-10-17 |
Astera Labs has received mostly positive grades with predominant Buy and Outperform ratings, reflecting a generally optimistic outlook with a minor recent downgrade.
Onto Innovation Inc. Grades
The table below lists recent ratings and grade changes from recognized analysts for Onto Innovation:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Stifel | Maintain | Hold | 2026-01-14 |
| Needham | Maintain | Buy | 2026-01-06 |
| Jefferies | Maintain | Buy | 2025-12-15 |
| 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 |
Onto Innovation’s grades show a strong Buy and Outperform consensus with stable ratings and occasional holds, indicating steady confidence from analysts.
Which company has the best grades?
Both Astera Labs and Onto Innovation hold a consensus Buy rating, but Astera Labs has a larger number of Buy and Outperform grades, including upgrades and few downgrades. This suggests Astera Labs may currently enjoy slightly stronger analyst endorsement, which could influence investor confidence and portfolio decisions.
Strengths and Weaknesses
Below is a comparative table outlining key strengths and weaknesses of Astera Labs, Inc. (ALAB) and Onto Innovation Inc. (ONTO) based on the latest financial and operational data.
| Criterion | Astera Labs, Inc. (ALAB) | Onto Innovation Inc. (ONTO) |
|---|---|---|
| Diversification | Moderate: Mainly product-focused revenue (393M USD) with limited service segment (3.2M USD) | High: Diverse revenue streams from parts (76.6M USD), services (60.3M USD), and systems/software (850.4M USD) |
| Profitability | Unfavorable: Negative net margin (-21.05%), negative ROE (-8.65%) and ROIC (-11.97%) | Favorable net margin (20.43%), neutral ROE (10.47%) and ROIC (8.77%) indicates healthier profitability |
| Innovation | Moderate: Improving ROIC trend (+65.5%) but still value-destructive | Strong: Significant ROIC growth (+344.5%), indicating effective capital use and innovation impact |
| Global presence | Limited data, but product focus suggests niche market penetration | Likely broader global footprint due to diversified products and services |
| Market Share | Smaller scale with 393M USD product revenue | Larger scale with total revenue exceeding 967M USD across segments |
Key takeaways: Both companies are experiencing growing profitability trends but remain value destructive. Onto Innovation shows stronger diversification, profitability, and scale, making it a more stable candidate. Astera Labs has potential but faces profitability challenges, requiring cautious risk management.
Risk Analysis
Below is a comparative analysis of key risks for Astera Labs, Inc. (ALAB) and Onto Innovation Inc. (ONTO) based on their most recent financial and operational data from 2024.
| Metric | Astera Labs, Inc. (ALAB) | Onto Innovation Inc. (ONTO) |
|---|---|---|
| Market Risk | High beta (1.51) indicates above-average volatility | Elevated beta (1.46), moderately volatile market exposure |
| Debt level | Very low debt (D/E = 0.0), strong balance sheet | Low debt (D/E = 0.01), well-managed leverage |
| Regulatory Risk | Moderate, sector-sensitive semiconductor industry | Moderate, exposure to global semiconductor regulations |
| Operational Risk | Small workforce (440 employees), scaling challenges | Larger workforce (1,551), operational complexity risk |
| Environmental Risk | Standard for semiconductor manufacturing, no major alerts | Similar industry profile, moderate environmental compliance risk |
| Geopolitical Risk | U.S.-based, exposed to trade tensions impacting supply chains | U.S.-based, supply chain and export controls risk |
In synthesis, ALAB faces significant market risk due to its high beta and negative profitability metrics, despite its strong balance sheet and low debt risk. ONTO shows a more balanced profile with moderate market risk and better profitability but carries operational complexity risks due to its larger scale. The semiconductor sector’s exposure to geopolitical tensions and regulatory shifts remains a critical risk factor for both companies.
Which Stock to Choose?
Astera Labs, Inc. (ALAB) shows strong revenue growth of 242% in 2024 but suffers from negative profitability with a net margin of -21.05% and unfavorable return ratios. Its debt levels remain low, and it holds a very favorable overall rating of B despite a moderate global ratios opinion.
Onto Innovation Inc. (ONTO) displays steady income growth of 21% with positive profitability metrics, including a 20.43% net margin and neutral to favorable returns on equity and invested capital. It maintains low debt and a very favorable B+ rating, supported by a neutral global ratios evaluation.
Considering ratings and financials, ALAB might appeal to risk-tolerant investors seeking strong top-line growth despite current losses, whereas ONTO could be more attractive to those valuing consistent profitability and financial stability. Both companies show improving profitability trends but are slightly unfavorable in value creation.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Astera Labs, Inc. Common Stock and Onto Innovation Inc. to enhance your investment decisions:
