Core Viewpoint - ASML Holding N.V. is identified as a top turnaround stock pick for 2025, indicating potential for recovery and growth in its stock performance [1]. Group 1: Company Overview - ASML is positioned as a blue-chip company with competitive advantages, industry-leading market share, and strong profitability [1]. - The focus is on building a market-beating portfolio that emphasizes both capital appreciation and aggressive dividend growth [1]. Group 2: Investment Strategy - The investment strategy prioritizes companies with wide moats and attractive valuations relative to forward growth in the US and European markets [1]. - Dividend investing is approached with an emphasis on free cash flow rather than merely chasing yield [1].

Core Viewpoint - ASML Holding N.V. (NASDAQ: ASML) has seen its stock remain relatively flat since a strong sell rating was issued last fall, indicating a lack of significant movement in its market performance [1] Group 1: Company Performance - The stock of ASML has not changed significantly since the sell rating was placed, suggesting stability or stagnation in its market position [1] Group 2: Analyst Background - The analyst has a strong focus on the tech sector and holds a Bachelor of Commerce Degree with Distinction, majoring in Finance, indicating a solid educational background in finance [1] - The analyst is a lifetime member of the Beta Gamma Sigma International Business Honour Society, reflecting a commitment to excellence in business [1] - The analyst emphasizes core values of Excellence, Integrity, Transparency, and Respect, which are deemed essential for long-term success in investment analysis [1]

Core Viewpoint - The earnings season is crucial for investors and analysts, particularly for tech and AI stocks, as they assess the impact of recent developments like the emergence of DeepSeek on valuations and market performance [1]. Group 1: Earnings Reports - Publicly traded companies report financial results quarterly to inform investors about earnings and balance sheet status, often providing guidance for future performance [2]. - Strong earnings and guidance typically lead to positive stock movements, with several tech and AI companies recently exceeding expectations [3]. Group 2: Netflix - Netflix reported strong subscriber growth, adding nearly 19 million paid subscriptions in the fourth quarter, significantly surpassing the expected 8.2 million [4]. - The company streamed major live events that attracted tens of millions of viewers, contributing to subscriber retention and growth across various content [5]. - Management raised its 2025 revenue projection by approximately $500 million to a range of $43.5 billion to $44.5 billion and announced a $15 billion share repurchase plan, alongside subscription price increases [6]. Group 3: GE Aerospace - GE Aerospace reported strong fourth-quarter earnings, beating analyst estimates for revenue, earnings, and operating profits, with an EPS of $1.32, exceeding consensus by $0.28 [8]. - Revenue reached $9.9 billion, surpassing estimates by $400 million, and operating profit was $1.9 billion, exceeding expectations by $200 million [8]. - The spin-off of healthcare and energy businesses has positively impacted GE Aerospace's performance [7]. Group 4: ASML - ASML reported fourth-quarter earnings that beat estimates, with net income of $2.8 billion, exceeding analyst expectations by approximately $500 million [9]. - Net sales were $9.64 billion, nearly $200 million above estimates, and the company maintained its 2025 revenue outlook [9]. - CEO Christophe Fouquet views the emergence of DeepSeek as a potential catalyst for increased semiconductor demand, despite recent challenges in the AI sector [10][11].

Group 1 - ASML Holdings reported better than expected earnings for the fourth fiscal quarter, indicating strong performance in the semiconductor equipment sector [1] - The positive earnings report from ASML follows an acceleration of chip sales growth reported by Taiwan Semiconductor Manufacturing (TSM), suggesting a favorable market trend [1]

Group 1 - ASML Holding N.V. is a significant player in the semiconductor industry, particularly in lithography technology [1] - The company has faced challenges over the past two years despite its strong strategic position [1] Group 2 - The article emphasizes the importance of ASML in the booming chip industry, highlighting its role in semiconductor manufacturing [1]

Core Viewpoint - The investment strategy focuses on fundamental, bottom-up analysis with an emphasis on long-term quality growth, targeting companies in niche markets with strong growth potential and reasonable valuations [1]. Group 1: Investment Strategy - The company aims for a 15% annual return on its portfolio [1]. - The portfolio typically consists of 15-20 stocks, emphasizing diversification, risk management, and macro-driven sector weights [1]. - The investment approach does not prioritize short-term stock performance or quarterly results [1]. Group 2: Company Characteristics - Target companies should have a solid management team and sound capital allocation policies [1]. - The focus is on identifying companies with strong growth potential in niche markets [1].

Core Viewpoint - ASML's fourth-quarter earnings report exceeded the company's expectations, indicating strong performance in the semiconductor industry [1] Financial Performance - The earnings report highlighted a significant increase in revenue compared to previous quarters, showcasing ASML's robust demand for its lithography systems [1] - The company reported a notable percentage increase in net income, reflecting effective cost management and operational efficiency [1] Market Position - ASML continues to strengthen its position as a leading supplier in the semiconductor manufacturing sector, driven by advancements in technology and increasing demand for high-performance chips [1] - The company's performance is indicative of broader trends in the semiconductor industry, which is experiencing growth due to rising demand across various sectors [1]

Financial Performance - ASML reported total net sales of €28.3 billion and net income of €7.6 billion for the full year 2024[1]. - In Q4 2024, total net sales reached €9.3 billion, with a gross margin of 51.7% and net income of €2.7 billion[4]. - Total net sales for 2024 reached €28.3 billion with a gross margin of 51.3%[70]. - Net income for 2024 was €7.6 billion, resulting in an EPS of €19.25[70]. - Total net sales for Q4 2024 reached €9,262.8 million, a significant increase from €7,237.0 million in Q4 2023, representing a growth of 28.1%[101]. - Gross profit margin improved to 51.7% in Q4 2024, up from 51.4% in Q4 2023[102]. - Net income for Q4 2024 was €2,693.4 million, compared to €2,048.1 million in Q4 2023, reflecting a year-over-year increase of 31.5%[101]. - The company reported a basic net income per ordinary share of €6.85 for Q4 2024, up from €5.21 in Q4 2023[101]. Sales and Bookings - Q4 2024 net bookings amounted to €7.1 billion, including €3.0 billion from EUV systems[5]. - ASML sold 119 new lithography systems in Q4 2024, totaling 380 units for the full year[2]. - Installed Base Management sales increased by 16% to €6.5 billion due to higher service and upgrade business[70]. - EUV system sales decreased by 9% to €8.3 billion, with revenue recognized on 44 EUV systems[70]. - DUV system sales increased by 4% to €12.8 billion, recognizing revenue on 374 systems, of which 34% were immersion systems[70]. - Metrology & Inspection systems sales rose by 20% to €646 million, driven by higher YieldStar and MBI systems sales[70]. Future Outlook - The company expects Q1 2025 total net sales to be between €7.5 billion and €8.0 billion, with a gross margin between 52% and 53%[5]. - For 2025, ASML anticipates total net sales to be between €30 billion and €35 billion, maintaining a gross margin between 51% and 53%[5]. - By 2030, the company anticipates annual revenue between approximately €44 billion and €60 billion, with a gross margin between approximately 56% and 60%[90]. Research and Development - R&D costs for Q1 2025 are expected to be around €1,140 million, with SG&A costs around €290 million[5]. - Research and development costs for Q4 2024 were €1,116.0 million, slightly higher than €1,041.3 million in Q4 2023[101]. - The company is investing heavily in R&D, with a budget increase of 25%, totaling $500 million for new technology development[106]. - Research and development expenses increased by 12%, totaling $150 million, focusing on innovative technologies[108]. Sustainability and ESG - ASML's EUV NXE energy use per wafer pass has been reduced by 54% since 2018, showcasing advancements in sustainability[65]. - The company has set a goal to achieve carbon neutrality by 2025, with an investment of $200 million in sustainable practices[106]. - ASML's ESG ratings have improved, with Sustainalytics ranking it 1 in the industry and MSCI giving it an AAA rating[65]. Employee and Talent Development - The number of interns and work-study students increased by 22% compared to 2023, highlighting the company's commitment to talent development[58]. - The number of payroll employees increased to 42,786 in Q4 2024, up from 40,310 in Q4 2023[102]. Market Trends and Industry Insights - The growth in artificial intelligence is identified as a key driver for growth in the semiconductor industry[6]. - The semiconductor industry is projected to exceed $1 trillion in sales by 2030, driven by significant investments in AI[35]. - Global data center and edge AI demands are expected to represent over 40% of semiconductor sales demand by 2030[38].

Group 1 - The semiconductor market heavily relies on ASML Holding N.V., which is considered to have a near-monopoly status in the industry [1] - ASML's business model is described as extraordinary due to its dominant position in the semiconductor market [1] Group 2 - The article emphasizes the importance of fundamental analysis in identifying undervalued stocks with growth potential [1]

2025 total net sales expected to be between €30 billion and €35 billion ASML 2024 Fourth-Quarter and Full-Year results Veldhoven, the Netherlands January 29, 2025 Agenda ASML reports €28.3 billion total net sales and €7.6 billion net income in 2024 January 29, 2025 Page 2 Public • The semiconductor industry remains strong, driven by artificial intelligence adoption across an expanding applications space and is expected to surpass $1 trillion in revenue by 2030 • The industry will require major innovations t ...