Industry Overview - Nanotechnology stocks represent companies focused on developing, manufacturing, or commercializing technologies and materials at the nanoscale, which ranges from approximately 1 to 100 nanometers. These include advanced materials, nanoelectronics, targeted drug-delivery systems, and nanosensors [2] - These stocks offer thematic exposure to high-growth, often early-stage and technically specialized fields, making them potentially more volatile and speculative [2] Company Summaries Onto Innovation (ONTO) - Onto Innovation Inc. specializes in designing, developing, manufacturing, and supporting process control tools for optical metrology. The company provides lithography systems and process control analytical software, along with process and yield management solutions [3] Nano Dimension (NNDM) - Nano Dimension Ltd. engages in additive manufacturing solutions, offering 3D printers that produce high-performance electronic devices (Hi-PEDs) using proprietary conductive and dielectric substances. The company also provides micro additive manufacturing systems and industrial additive manufacturing systems for fabricating ceramic and metal parts [4] NVE Corporation (NVEC) - NVE Corporation develops and sells devices utilizing spintronics, a nanotechnology that leverages electron spin for data acquisition, storage, and transmission. The company manufactures spintronic products, including sensors and couplers [5] Clene Inc. (CLNN) - Clene Inc. is a clinical-stage pharmaceutical company focused on discovering, developing, and commercializing novel clean-surfaced nanotechnology therapeutics. Its lead drug candidate, CNM-Au8, is undergoing various clinical trials for conditions such as amyotrophic lateral sclerosis (ALS), chronic optic neuropathy, and Parkinson's Disease [6][7]

Company Performance - Onto Innovation (ONTO) closed at $133.08, reflecting a +2.07% increase from the previous day, outperforming the S&P 500's daily gain of 0.4% [1] - Prior to the latest trading session, ONTO shares had gained 8.13%, surpassing the Computer and Technology sector's gain of 2.27% and the S&P 500's gain of 1.02% [1] Upcoming Earnings - The upcoming earnings disclosure is highly anticipated, with projected earnings per share (EPS) of $0.87, indicating a 35.07% decrease from the same quarter last year [2] - Revenue is forecasted to be $218.24 million, reflecting a 13.47% decline compared to the corresponding quarter of the previous year [2] Fiscal Year Estimates - For the entire fiscal year, Zacks Consensus Estimates predict earnings of $4.89 per share and revenue of $995.73 million, showing changes of -8.43% and +0.85% respectively from the previous year [3] - Recent changes to analyst estimates are crucial as they often indicate shifts in near-term business trends, with positive alterations suggesting analyst optimism [3] Valuation Metrics - Onto Innovation is currently trading at a Forward P/E ratio of 26.68, which aligns with the industry average [6] - The company has a PEG ratio of 0.89, matching the industry average, indicating a balance between earnings growth expectations and valuation [7] Industry Context - The Nanotechnology industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 232, placing it in the bottom 7% of over 250 industries [7] - The strength of individual industry groups is measured by the Zacks Industry Rank, with top-rated industries outperforming the bottom half by a factor of 2 to 1 [8]

Company Performance - Onto Innovation (ONTO) closed at $139.83, with a +1.89% increase from the previous day, outperforming the S&P 500's gain of 0.06% [1] - Prior to the latest trading session, Onto Innovation's shares had increased by 33.68%, significantly surpassing the Computer and Technology sector's gain of 8.78% and the S&P 500's gain of 3.94% [1] Upcoming Earnings - Analysts expect Onto Innovation to report earnings of $0.89 per share, reflecting a year-over-year decline of 33.58% [2] - The consensus estimate for revenue is $218.24 million, indicating a 13.47% decrease from the same quarter last year [2] Fiscal Year Estimates - For the entire fiscal year, the Zacks Consensus Estimates predict earnings of $4.92 per share and revenue of $992.52 million, showing changes of -7.87% and +0.53% respectively from the previous year [3] Analyst Forecast Revisions - Recent revisions to analyst forecasts for Onto Innovation are important as they reflect changes in short-term business dynamics, with positive revisions indicating analyst optimism [4] Zacks Rank and Valuation - Onto Innovation currently holds a Zacks Rank of 4 (Sell), with the Zacks Consensus EPS estimate remaining unchanged over the last 30 days [6] - The company is trading at a Forward P/E ratio of 27.91, which aligns with the industry average [7] - The PEG ratio for Onto Innovation is 0.93, consistent with the Nanotechnology industry's average PEG ratio of 0.93 [7] Industry Context - The Nanotechnology industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 235, placing it in the bottom 5% of over 250 industries [8]

Group 1 - Onto Innovation Inc. shares increased over 4% in pre-market trading after Jefferies upgraded the stock to Buy from Hold and raised its price target to $170 from $100 [1] - Jefferies expressed improved confidence in Onto's ability to regain lost CoWoS market share following recent management meetings [1] - Revenue is expected to bottom in the first quarter of 2026 before reaccelerating in the second half of the year, driven by ongoing accelerator builds and tightening memory markets [1] Group 2 - Jefferies raised its earnings forecasts to $5.55 for 2026 and $7.08 for 2027, applying a 24x multiple on 2027 EPS to derive the new target [2]

Upgrades - Jefferies upgraded Onto Innovation (ONTO) to Buy from Hold with a price target of $170, up from $100, citing expected growth reacceleration in the second half of 2026 [2] - Bernstein upgraded United Rentals (URI) to Outperform from Market Perform with a price target of $1,128, up from $885, indicating a 20% upside from current levels, viewing it as a cyclical rebound and portfolio transition story [2] - Guggenheim upgraded Johnson & Johnson (JNJ) to Buy from Neutral with a price target of $206, up from $167, expressing confidence in the company's navigation of Stelara's loss of exclusivity and anticipating growth from its Innovative Medicine business [3] - Wells Fargo upgraded Omnicom (OMC) to Overweight from Equal Weight with a price target of $91, up from $78, highlighting compelling upside potential near the close of the Interpublic Group merger [4] - Wells Fargo also upgraded CoreWeave (CRWV) to Overweight from Equal Weight with a price target of $170, up from $105, noting the company's positioning to benefit from elevated build cycles and hyperscaler industry shortages into 2026 [5] - Melius Research upgraded CoreWeave to Buy from Hold with a price target of $165, up from $128 [5] Downgrades - Baird downgraded Lululemon (LULU) to Neutral from Outperform with a price target of $195, down from $225, due to low near-term confidence in growth and margin trajectory [6] - KeyBanc downgraded Lam Research (LRCX) to Sector Weight from Overweight without a price target, believing strong memory pricing may take time to drive new tool demand [6] - Citizens JMP downgraded CyberArk (CYBR) to Market Perform from Outperform without a price target, citing the pending acquisition by Palo Alto Networks and not anticipating a superior proposal [6] - Seaport Research downgraded Oklo (OKLO) to Neutral from Buy without a price target, acknowledging positives in business development but stepping aside based on valuation [6] - Jefferies downgraded Vistra (VST) to Hold from Buy with a price target of $230, down from $241, following a 160% stock run-up attributed to expectations of a Comanche Peak nuclear deal [6]

Core Viewpoint - ONTO Innovation (NYSE:ONTO) has been identified as a new long idea by Hedgeye, with a potential upside of 25% [1] Group 1: Company Performance - ONTO Innovation's stock rose by 7% following its inclusion as a long idea by Hedgeye [1] - The company is viewed as a potential recovery story, transitioning from a major underperformer to an outperformer in the upcoming year [1] Group 2: Analyst Insights - Hedgeye analyst Felix suggests that ONTO could represent significant growth potential in the metrology sector [1]

Group 1 - Onto Innovation Inc. will exhibit at SEMICON West from October 7-9, 2025 [1] - The company invites customers to booth 1229 in Hall 5, North Building, lower level [1] - Onto Innovation will showcase its latest portfolio of integrated process and process control solutions for AI device manufacturing and other markets [1] Group 2 - The exhibition will feature next-generation metrology and inspection technologies, including optical solutions [1]

Company Performance - Onto Innovation (ONTO) closed at $116.00, down 3.8% from the previous trading session, underperforming the S&P 500 which lost 0.1% [1] - The stock has increased by 12.11% over the past month, outperforming the Computer and Technology sector's gain of 5.94% and the S&P 500's gain of 2.57% [1] Earnings Expectations - The upcoming earnings report is expected to show an EPS of $0.89, a decrease of 33.58% from the same quarter last year [2] - Quarterly revenue is projected at $218.24 million, down 13.47% year-over-year [2] Full Year Projections - For the full year, earnings are estimated at $4.92 per share, reflecting a decline of 7.87%, while revenue is projected at $992.52 million, a slight increase of 0.53% from the previous year [3] Analyst Estimates - Recent changes to analyst estimates indicate a positive outlook for Onto Innovation, as these revisions often correlate with near-term business trends [3][4] - The Zacks Consensus EPS estimate has decreased by 1.11% in the past month, and Onto Innovation currently holds a Zacks Rank of 4 (Sell) [5] Valuation Metrics - Onto Innovation has a Forward P/E ratio of 24.52, which is in line with the industry average [6] - The company has a PEG ratio of 0.82, indicating a favorable valuation relative to its expected earnings growth [7] Industry Context - The Nanotechnology industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 233, placing it in the bottom 6% of over 250 industries [8]

Group 1 - TimesSquare Capital Management's "U.S. Small Cap Growth Strategy" reported a gross return of 11.28% and a net return of 11.02% for Q2 2025, underperforming the Russell 2000 Growth Index which returned 11.97% [1] - The fund's performance was driven by double-digit returns in equities as global economic activity improved [1] - Onto Innovation Inc. (NYSE:ONTO) was highlighted as a key stock, with a one-month return of 2.14% but a significant 41.42% decline over the past 52 weeks, closing at $110.98 per share with a market capitalization of $5.44 billion [2] Group 2 - TimesSquare Capital expressed a preference for critical system providers and specialized component designers within the Information Technology sector, noting Onto Innovation's role in providing high-performance control metrology and inspection systems for microelectronic device manufacturers [3] - Despite Onto Innovation's strong Q2 revenue of $253.6 million, reflecting a 5% year-over-year increase, the company's second-quarter projections fell short, leading to a 16% drop in share price [4] - The number of hedge funds holding Onto Innovation increased from 31 to 37 in the second quarter, indicating growing interest, although it was not among the 30 most popular stocks among hedge funds [4]

Core Insights - Onto Innovation Inc. has launched the Atlas G6 optical critical dimension (OCD) metrology system, designed for next-generation GAA transistors and high-bandwidth memory (HBM) applications, enhancing precision in process control [1][9] - The semiconductor industry is experiencing tighter dimensions, with manufacturers facing up to 30% reductions each cycle, necessitating precise measurements for GAA and smaller DRAM cell blocks [2] - The Atlas G6 features smaller spot sizes and improved signal-to-noise performance, crucial for measuring shrinking geometries directly on devices without compromising data quality [3] Product Development - The Atlas G6 incorporates an extra data channel and integrates with Onto's Ai Diffract OCD analysis software, utilizing machine learning algorithms to enhance recipe robustness and reduce time to solutions [4] - Onto's Dragonfly 3Di platform continues to be a key growth driver, with over 20 systems shipped in the second quarter, addressing sub-surface defect inspection needs in advanced semiconductor and AI packaging technologies [7] Market Performance - Second-quarter memory revenues remained strong, particularly in NAND, while DRAM revenues stayed near record highs; Onto secured over $20 million in new orders for Atlas OCD and Iris films, with most revenues expected in Q4 [6][9] - The company faces challenges from U.S.-China trade tensions, with tariffs expected to add $2-$3 million in costs, impacting gross margins, which are guided at 53-55% [8] Customer Base and Risks - Onto serves various markets, including Bare Wafer and Image Sensors, with unique capabilities for detecting yield-killing voids in hybrid bonding applications [5] - The company has a high concentration risk, with the top three customers accounting for 52% of its projected 2024 revenues [8]