GrowthTurtle
Data Science PhD & IEEE Fellow, Ex-Two Sigma
Onto Innovation looks cheap against its earnings, trading at 31x forward earnings versus the roughly 38x chip-equipment makers usually get. Applying 38x to next year's forecast $9.95 a share, give or take 12%, puts fair value at about $333–423, versus $308.30 now. The case leans on that forecast, with forward EPS 102% above trailing, and rests on valuation levels from reported earnings and estimates, not fundamental work. x.com
Onto Innovation is one of the best electronics plays in fiber optics and communications. It is profitable with growing sales, a 0.6 PEG, raised estimates and top ratings with large price targets, and it has returned 5x the Nasdaq-100 over the past year. x.com
Accelerating earnings mean ASML is not expensive right now. It trades at 24x forward earnings and 19x forward EV/EBITDA. x.com
Onto Innovation looks good around current levels because it is cheaper than many of its peers. The comparison comes in reply to @Opu61659893, who argued that a structural shift toward heterogeneous integration and advanced packaging should favor names like Amkor, Onto and Entegris, and that an AI capex unwind would slow but not kill it. Amkor could also work from here, though ASE is a little cheaper. x.com
Intel may now be too expensive after going from the worst semiconductor play to one of the best in under a year, as an expected return to profitability came with a multiple rerating on top. With earnings still compressed, a three-year forward view fits better, and on that basis a 2028 P/E of 50, cited in a post the author replies to, is too high. x.com x.com x.com
The Nasdaq 100 already effectively prices in a severe semiconductor recession. QQQ trades at about 20 times 2027 EPS versus a 10-year average forward P/E near 25; halving 2027 estimates for Nvidia, Broadcom, AMD, Micron, Lam Research and Applied Materials would lift that only to 24.5. If the market instead traded at 20 times in that scenario, downside would be about 20%. Capex seems unlikely to be cut materially unless growth at AI labs such as Anthropic decelerates dramatically. x.com
Advantest looks expensive even on peak-cycle earnings, at about 40 times its 2028 earnings. @holden_commodor argues testing is the ultimate semiconductor bottleneck after memory, with Advantest dominant ahead of Teradyne, and would buy if the drop continues. x.com
Lam Research's valuation is scary, at 73 times earnings, a PEG ratio of 2.16 and 82 times free cash flow. x.com
Semiconductor gains will now have to come from earnings growth rather than multiple expansion, but NVIDIA at 19x forward earnings can still make money. Rising margins normally compress multiples because peak margins signal peak cycle; this cycle ran long and euphoric buying drove multiples up, so a correction was bound to happen. With capex growth projected to slow from 2028, semis growth will likely slow too, and the window to profit from buying chip stocks at 25x sales is closed. x.com
Nvidia looks anomalously cheap among large semiconductor companies. It has the biggest market cap, the fastest growth and the cheapest valuation, and the market doesn't know what to do with that. x.com
Amtech Systems' 131x trailing P/E hides an advanced-packaging turnaround. Its TrueFlat technology on Pyramax vacuum reflow platforms tackles substrate warpage in stacked dies and HBM, and these systems are over 30% of thermal segment revenue, heading past 40%. A semi-fabless shift under CEO Robert Daigle lifted gross margin to 47.7% on Q2 revenue up 31%, and its silicon carbide polishing consumables are rebounding. Institutions buying a $60M raise at $20.50 signal significant upside. x.com
