Semiconductor Equipment Sell-Off Overdone: Jump on These 5 Stocks Now

Onto Innovation

This is another off-the-radar stock that offers investors an excellent entry point. Onto Innovations Inc. (NASDAQ: ONTO) engages in the design, development, manufacture and support of process control tools that perform macro defect inspection and metrology, lithography systems and process control analytical software worldwide.

The company offers process and yield management solutions and device packaging and test facilities through standalone systems for macro-defect inspection, packaging lithography, probe card test and analysis and transparent and opaque thin film measurements. Its process control software portfolio includes solutions for standalone tools, groups of tools or factorywide suites.

Onto also provides spare parts and software licensing services. Its products are used by semiconductor wafer and advanced packaging device manufacturers; silicon wafer and include light-emitting diode, vertical-cavity surface-emitting laser, micro-electromechanical system, CMOS image sensor, power device, RF filter data storage and various industrial and scientific applications.

Stifel has set an $84 price target. That is the same as the consensus target. Thursday’s final trade at $63.97 a share followed an almost 5% rise for the day.

Veeco Instruments

This stock has been hammered, but Stifel still sees big-time upside potential. Veeco Instruments Inc. (NASDAQ: VECO) develops, manufactures, sells and supports semiconductor and thin-film process equipment primarily to make electronic devices worldwide.

The company offers laser annealing, ion beam deposition and etch, metal organic chemical vapor deposition, single wafer wet processing and surface preparation, molecular beam epitaxy and atomic layer deposition and other deposition systems, as well as packaging lithography equipment. Its process equipment systems are used in the production of a range of microelectronic components, including logic, dynamic random-access memory, photonics devices, power electronics, radio frequency filters and amplifiers, thin-film magnetic heads and other semiconductor devices.

Veeco markets and sells its products to integrated device manufacturers and foundries; outsourced semiconductor assembly and test, hard disk drive and photonics manufacturers; and research centers and universities.

Stifel has a $26 price target on Veeco Instruments stock. The $28.33 consensus is higher, and Thursday’s close was at $22.62, which was a 2% gain on the day.

Despite the well-founded bullishness at Stifel, the market is very overbought. With inflation concerns mounting and seasonal summer slowdowns on Wall Street coming, it may make sense to buy partial positions now and scale into more stock over the course of the summer.

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