Goldman Sachs’ Best Phase 2 AI Stocks: Top 24 High Conviction AI Stocks

19. Onto Innovation Inc. (NYSE:ONTO)

Year To Date Share Price Gain: 50.64%

Number of Hedge Fund Investors in Q2 2024: 39

Onto Innovation Inc. (NYSE:ONTO) is a mid sized backend semiconductor company. The firm provides lithography systems for panel packaging, defect inspection products, and other items. Consequently, it’s a classic phase two AI stock according to Goldman Sachs’ classification since its products are essential for manufacturing chips. Onto Innovation Inc. (NYSE:ONTO) is essential to the AI wave particularly because of its packaging products. Packaging is a bottleneck area of AI chip manufacturing. It is one of the final stages of semiconductor fabrication in which chips are packaged into forms that are usable by data centers. Shortage of packaging capacity has forced TSMC to invest billions in bolstering capacity, and Onto Innovation Inc. (NYSE:ONTO) can benefit from this demand as well. Consequently, the stock’s 50.64% year to date gain is unsurprising.

Carillon Tower Advisers mentioned Onto Innovation Inc. (NYSE:ONTO) in its Q2 2024 investor letter. Here is what the fund said:

“Onto Innovation Inc. (NYSE:ONTO) provides process control solutions and inspection systems primarily used in the fabrication of semiconductors and other solid-state devices. The company’s quarterly earnings report exceeded expectations and raised guidance, led by an inflection in advanced nodes and continued strength in packaging inspection, especially tied to semiconductors that enable artificial intelligence. Investors are excited about the prospects of the company’s packaging technology being critical in the manufacturing of next-genera[1]tion artificial intelligence (AI) semiconductors.”