Reviewing Ambiq Micro (NYSE:AMBQ) & Onto Innovation (NYSE:ONTO)

Onto Innovation (NYSE:ONTO) and Ambiq Micro (NYSE:AMBQ) are both technology companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, institutional ownership, risk, valuation and dividends.

Insider and Institutional Ownership

98.3% of Onto Innovation shares are held by institutional investors. 0.5% of Onto Innovation shares are held by insiders. Comparatively, 10.0% of Ambiq Micro shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Onto Innovation and Ambiq Micro’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Onto Innovation	11.84%	13.44%	10.30%
Ambiq Micro	-37.77%	-11.85%	-10.80%

Analyst Ratings

This is a summary of current recommendations and price targets for Onto Innovation and Ambiq Micro, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Onto Innovation	0	1	11	2	3.07
Ambiq Micro	1	4	5	0	2.40

Onto Innovation presently has a consensus price target of $380.00, indicating a potential upside of 29.75%. Ambiq Micro has a consensus price target of $83.71, indicating a potential upside of 41.10%. Given Ambiq Micro’s higher possible upside, analysts plainly believe Ambiq Micro is more favorable than Onto Innovation.

Risk & Volatility

Onto Innovation has a beta of 1.58, suggesting that its stock price is 58% more volatile than the S&P 500. Comparatively, Ambiq Micro has a beta of 5.34, suggesting that its stock price is 434% more volatile than the S&P 500.

Valuation and Earnings

This table compares Onto Innovation and Ambiq Micro”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Onto Innovation	$1.01 billion	14.30	$136.76 million	$2.66	110.10
Ambiq Micro	$72.51 million	19.78	-$36.46 million	($2.12)	-27.98

Onto Innovation has higher revenue and earnings than Ambiq Micro. Ambiq Micro is trading at a lower price-to-earnings ratio than Onto Innovation, indicating that it is currently the more affordable of the two stocks.

Summary

Onto Innovation beats Ambiq Micro on 11 of the 15 factors compared between the two stocks.

About Onto Innovation

Onto Innovation Inc. engages in the design, development, manufacture, and support of process control tools that performs optical metrology. The company offers lithography systems and process control analytical software. It also offers process and yield management solutions, and device packaging and test facilities through standalone systems for optical metrology, macro-defect inspection, packaging lithography, and transparent and opaque thin film measurements. In addition, the company provides process control software portfolio that includes solutions for standalone tools, groups of tools, and enterprise-or factory-wide suites. Further, it engages in systems software, spare parts, and other services, as well as offers software licensing services. The company's products are used in semiconductor and advanced packaging device manufacturers; silicon wafer; light emitting diode; vertical-cavity surface-emitting laser; micro-electromechanical system; CMOS image sensor; power device; analog device; RF filter; data storage; and various industrial and scientific applications. Onto Innovation Inc. was founded in 1940 and is headquartered in Wilmington, Massachusetts.

About Ambiq Micro

Our mission is to enable intelligence (artificial intelligence (AI) and beyond) everywhere by delivering the lowest power semiconductor solutions. We are a pioneer and leading provider of ultra-low power semiconductor solutions designed to address the significant power consumption challenges of general purpose and AI compute – especially at the edge. Our customers rely on Ambiq to deliver AI compute closer to end users (edge environments) where power consumption challenges are the most severe. Our leading position is built upon our hardware and software innovations that deliver two to five times lower power consumption than traditional semiconductor designs. Our products power over 270 million devices today. We shipped more than 42 million units in 2024, and we estimate that over 40% of them ran AI algorithms. We seek to drive growth in AI adoption at the edge in the personal devices, medical/healthcare, industrial edge, and smart home and building markets and continue to set new standards in edge AI performance and power efficiency. Over time, we expect to integrate our ultra-low power technology into additional chip products that benefit from greater power efficiency, including high-performance compute applications such as AI data centers and automotive. AI is perhaps the most disruptive and revolutionary technology trend of recent history, estimated to represent $23 trillion of global annual spend by 2040, according to McKinsey. AI use cases continue to permeate our lives and improve our daily productivity by enabling us to interact with devices via voice and gestures, unlock our homes with facial recognition, track health accurately and intelligently, and hold clear calls amidst loud background noise. To date, a majority of AI compute has been deployed in data centers due to its large physical scale and the need for wall plug energy, as AI compute requires enormous and steady energy resources. At the edge, however, power limitations have been especially acute due to small device size and limited battery life. We believe this greatly constrains the potential of AI to improve our daily, on-the-go lives. Enabling AI at the edge – where the action takes place – with vastly improved power efficiency will allow faster real-time decision-making due to data proximity, greater data privacy, higher energy efficiency from reduced network usage, and less dependence on constant costly connections to the cloud. We believe new AI use cases will only be possible if edge devices are much more power efficient. Our proprietary Sub-threshold Power Optimized Technology (SPOT) platform is designed to fundamentally and cost-effectively reduce power consumption of battery- and wireline-powered devices alike. Depending on the application, devices incorporating SPOT demonstrate a two to five times reduction in power consumption compared to conventional integrated circuit designs. SPOT is a ground-breaking approach at the chip design level that incorporates sub- and near-threshold hardware without using expensive manufacturing processes. We provide a full-stack solution encompassing tightly integrated hardware and software. Our solutions include a diverse family of systems-on-chip (SoCs) and the software required to enable on-chip AI processing, general compute, sensing, security, storage, wireless connectivity, and advanced graphics. Our SoC solutions deliver compute at a very small fraction of the power consumed by our competitors’ products. Our ultra-low power SoCs serve a wide range of markets requiring on-device and real-time AI, including smartwatches and fitness trackers, augmented and virtual reality (AR/VR) glasses, smart rings, digital health monitors, security systems and access control, livestock tracking, crop monitoring, and factory automation. These devices increasingly offer on-chip AI-powered features such as speech recognition, domain-specific language models, image and video processing, and sensing, further straining power consumption, which our solutions are positioned to address. As global demand for our SoC solutions accelerates, our sales and marketing efforts are increasingly focused on our end customers in target geographies such as the United States, Europe, and Asia (ex-MainlandChina). We were incorporated in Delaware on January 20, 2010 under the name Cubiq Microchip, Inc., and in October 2012, changed our name to Ambiq Micro, Inc. Our principal executive offices are located in Austin, Texas.