The crisis sparked by the recent standoff between the Netherlands and China over chipmaker Nexperia underscores just how fragile the supply chain is, ASML's head said on Sunday. https://t.co/3F3ux0fODk ...

Core Viewpoint - ASML's CEO stated that the company has not been impacted by the ongoing tensions between The Netherlands and China regarding the Dutch government's acquisition of chipmaker Nexperia [1] Company Summary - ASML, a Dutch chip-gear manufacturer, remains unaffected by geopolitical issues involving the Netherlands and China [1]

Core Viewpoint - H&H International Investment's portfolio value increased by approximately 28% to around $14.7 billion as of Q3 2025, compared to $11.5 billion at the end of June 2025 [2] Portfolio Changes - The portfolio structure has changed, with Apple (AAPL) remaining the largest holding at 60.42%, followed by Berkshire Hathaway (BRK.B) at 17.78%, which saw a significant increase of 53.53% [4][5] - Other notable holdings include Pinduoduo (PDD) at 7.72%, Occidental Petroleum (OXY) at 4.36%, Alibaba (BABA) at 3.38%, and Google (GOOG) at 3.00% [4] - The number of holdings increased from 8 to 11 since Q1 2025, maintaining over 10 holdings thereafter [4] Significant Transactions - In Q3 2025, H&H International Investment initiated a position in ASML, completing the "AI quartet" with existing holdings in Nvidia, Microsoft, and TSMC [5][6] - The investment in Berkshire Hathaway was notably increased, with its market value reaching approximately $2.6 billion by the end of Q3 2025 [11] Insights on Major Holdings - Apple remains a core holding, with a slight reduction in shares but a significant increase in market value to $8.9 billion [7] - Berkshire Hathaway is viewed positively, with the belief that its cultural values and business model are strong, making it a preferable investment compared to mutual funds [12][13] - Pinduoduo is considered a "risky investment," with the potential for significant growth, although the investor expresses uncertainty about its business model [20][26] AI and Technology Investments - The inclusion of ASML and the existing positions in Nvidia, Microsoft, and TSMC signify a strong focus on the AI ecosystem [14] - Concerns about Nvidia's market dominance and the potential impact of AI on traditional search businesses like Google were expressed [19][20] Investment Philosophy - The investor emphasizes the importance of understanding business models and cultural fit when selecting investments [8][29] - There is a recognition of the need to adapt to changing market conditions and the potential risks associated with emerging technologies like AI [36][38]

Group 1 - The portfolio's stock selection in Q3 2025 was broadly negative across sectors, indicating performance headwinds faced by the investment style [2] - The commentary reflects on the overall challenges in the market that impacted the portfolio's performance [2] - The management's insights suggest a need for strategic adjustments in response to the prevailing market conditions [2]

Core Viewpoint - The article discusses the recent decline in the U.S. stock market, driven by uncertainty surrounding the Federal Reserve's monetary policy and the impact of incomplete employment data due to a government shutdown [1][2][4]. Economic Data and Federal Reserve - The October employment report, which was supposed to be released on November 7, was not published due to the government shutdown, leading to a lack of unemployment rate data [3]. - Analysts express concerns that the absence of complete economic data complicates the Federal Reserve's decision-making process regarding interest rate cuts, contributing to a pessimistic outlook among investors [4][5]. - The market's expectation for a rate cut in December has shifted from being almost certain to a more uncertain stance, influenced by differing opinions among Federal Reserve officials [5]. Stock Market Performance - Major U.S. stock indices experienced significant declines, with the Dow Jones dropping approximately 300 points, the Nasdaq falling over 1.5%, and the S&P 500 decreasing by about 1% [2]. - Notable declines in individual stocks include Tesla down 5.73%, Arm down 5.36%, and Disney's stock plummeting nearly 10% despite better-than-expected earnings due to revenue shortfalls [6][7]. Market Sentiment - The article highlights a general sense of volatility in the market as investors react to the uncertain economic landscape and the Federal Reserve's potential policy shifts [4][5].

Core Viewpoint - The article discusses the current state of AI stocks, highlighting that while many have inflated valuations, there are a few undervalued companies with strong fundamentals that present good investment opportunities. Group 1: AI Stock Valuations - Many AI stocks, such as Nvidia and Palantir Technologies, have seen their valuations become excessive, with Nvidia trading at over 50 times earnings and Palantir at a staggering $420 billion despite low revenue generation [2][3] - Investors may be hesitant to invest in AI stocks due to these high valuations, which do not reflect the companies' current financial performance [2] Group 2: Undervalued AI Stocks - ASML is highlighted as a key player in the tech sector, dominating the market for extreme ultraviolet photolithography machines, with profit margins around 29% and a price-to-earnings ratio of 36, lower than the sector average [4][5] - Taiwan Semiconductor Manufacturing (TSMC) is noted for its leadership in chip production, reporting a 41% year-over-year sales increase to $33.1 billion, with profit margins around 46% and trading at 32 times trailing earnings [8][9][11] - Alphabet is considered undervalued, trading at less than 28 times trailing earnings, with significant assets like YouTube and Google Search, and a promising AI chatbot, Gemini, which enhances its business prospects [12][13][14] Group 3: Market Performance and Future Outlook - ASML's stock has risen nearly 54% in the past year, indicating strong market performance, with expectations for further growth due to its critical role in chip development for AI [7] - TSMC's market cap is around $1.2 trillion, but it is suggested that it deserves a higher valuation given its competitive advantages [11] - Alphabet's market cap stands at $3.5 trillion, and it is argued that it should be valued even higher due to its diverse business model and AI capabilities [14][15]

Group 1 - ASML's new facility in Hwaseong, South Korea, has been completed, covering an area of 16,000 square meters and featuring DUV and EUV lithography equipment remanufacturing centers and advanced technology training centers. This aims to enhance collaboration with local semiconductor companies like Samsung Electronics and SK Hynix. ASML plans to invest 240 billion KRW (approximately 12 billion RMB) in building a semiconductor equipment cluster in Hwaseong by 2025 [2] - CATL's chairman, Zeng Yuqun, announced that the fifth generation of lithium iron phosphate batteries has begun mass production, building on the success of the fourth generation, which leads the industry in high energy density, long lifespan, and high power [2] - Samsung Electronics has set a management goal for its foundry business to return to profitability and achieve a 20% market share by 2027. The foundry has been operating at a loss since 2022, but recent large orders from Tesla and the upcoming revenue contribution from the Texas Taylor wafer fab are expected to improve its overall status [2] - UBTECH has commenced mass delivery of its full-size industrial humanoid robot, Walker S2, with cumulative orders exceeding 800 million RMB since early 2025 [2]

Core Concept - The article discusses the concept of "wide moats," which refers to companies with durable competitive advantages that protect them from rivals and support lasting profitability [1][3]. Group 1: Companies with Wide Moats - Lam Research Corporation (LRCX), ASML Holding N.V. (ASML), NVIDIA Corporation (NVDA), and Moody's Corporation (MCO) are highlighted as examples of companies with wide economic moats [2]. - These companies operate in industries with significant barriers to entry, which help safeguard their market positions and promote consistent revenue growth [2][3]. Group 2: Competitive Advantages - Firms with wide economic moats benefit from brand power, cost efficiency, network effects, regulatory protection, and economies of scale, making it difficult for newcomers to capture market share [3]. - Such companies typically maintain robust pricing power, steady profit margins, and ample capacity to reinvest in growth, reinforcing their long-term dominance [3][4]. Group 3: Investment Appeal - Investing in wide-moat companies is appealing due to their ability to generate stable, long-term returns, especially during economic slowdowns and market volatility [4][5]. - These firms tend to produce reliable cash flows, weather market fluctuations effectively, and reward shareholders through consistent dividends and stock price appreciation [5]. Group 4: Lam Research Corporation - Lam Research specializes in wafer fabrication equipment, particularly in etch and deposition technologies critical to semiconductor manufacturing, benefiting from deep expertise and long-term customer relationships [7]. - The company is positioned to capitalize on the growing semiconductor memory market driven by advancements in AI, machine learning, and cloud computing, leading to increased demand for memory chips [8][9]. Group 5: ASML Holding N.V. - ASML is a vital supplier to the semiconductor industry, holding a near-monopoly on extreme ultraviolet (EUV) lithography, essential for producing advanced chips at 3nm and below [10][11]. - The company's High-NA EUV technology is critical for future chip manufacturing, with sustained demand expected as chipmakers ramp up production of smaller, more powerful chips [12][13]. Group 6: NVIDIA Corporation - NVIDIA leads in graphics processing units (GPUs) and AI, with a technological moat that ensures its competitive edge through substantial R&D investment and a strong software ecosystem [14]. - The company is expanding its market presence in enterprise AI and data centers, driven by increasing demand for GPUs as businesses shift towards cloud solutions [15][16][17]. Group 7: Moody's Corporation - Moody's is a leader in credit ratings and analytics, benefiting from regulatory reliance on its ratings and a strong reputation, creating high barriers for new entrants [18]. - The company is pursuing growth through strategic acquisitions, diversifying its revenue streams and enhancing its presence in various markets, including banking and insurance [19][21].

Core Insights - Lam Research (LRCX) and ASML Holding (ASML) are key players in the semiconductor equipment industry, crucial for chipmaking processes and benefiting from the AI-driven boom in chip fabrication [1][2] - Both companies have different fundamentals, growth outlooks, and valuations, presenting varied risk-reward profiles for investors [2] Lam Research Overview - Lam Research is leveraging AI trends by providing essential tools for manufacturing next-generation semiconductors, including high-bandwidth memory (HBM) and advanced packaging chips [3][4] - The company reported shipments for gate-all-around nodes and advanced packaging exceeding $1 billion in 2024, with expectations to triple this figure to over $3 billion in 2025 [5] - Lam Research has maintained over $5 billion in quarterly revenues for the past two quarters, driven by demand from major chipmakers like TSMC, Samsung, and Micron [6] - In the first quarter of fiscal 2026, revenues reached $5.32 billion, a 28% year-over-year increase, with non-GAAP EPS of $1.26, reflecting a 46.5% increase [7] ASML Holding Overview - ASML Holding holds a unique position in the chip equipment market as the sole producer of extreme ultraviolet (EUV) lithography machines at scale, essential for manufacturing chips at advanced nodes [8][9] - The company is introducing next-generation High-NA EUV machines, which will cater to the demand for smaller, more efficient chips, particularly in AI applications [9] - However, ASML faces challenges from U.S.-China export restrictions, which may hinder its growth in the near term [11] - ASML's revenue growth has slowed, with a mere 0.7% increase year-over-year in the third quarter of 2025, down from 23% in the second quarter and 46% in the first quarter [12] Comparative Analysis - Lam Research shows a steadier long-term growth profile, with revenue growth estimates of 12.7% and 11.2% for fiscal 2026 and 2027, respectively, and non-GAAP EPS expected to rise by 14% and 15.2% [14] - In contrast, ASML's revenue and EPS growth for 2025 are projected at 23.5% and 39.7%, but are expected to decelerate significantly to 3.2% and 3.6% in 2026 [17] - Year-to-date, Lam Research shares have surged 130.3%, while ASML shares increased by 49.9% [20] - Lam Research trades at 33.39 times forward earnings, compared to ASML's 34.64 times, making LRCX appear more reasonably priced given its stronger near-term momentum [21] Conclusion - Both companies are positioned to benefit from the AI-driven semiconductor investment cycle, but Lam Research's broader exposure to high-growth markets and lower valuation provide a stronger upside potential for investors [23] - Lam Research currently holds a Zacks Rank 1 (Strong Buy), while ASML has a Zacks Rank 2 (Buy) [24]

Core Insights - The article emphasizes the critical role of DUV lithography in semiconductor manufacturing, highlighting that it accounts for 80% of microelectronic chips produced globally, with 90% of the production layers still relying on DUV technology despite the emergence of EUV [1][3][11]. DUV Technology - DUV lithography machines operate at wavelengths from 365 nm to 193 nm, covering mainstream processes from 0.35 microns to 14 nm, making them both effective and cost-efficient [3][11]. - The immersion technology introduced by TSMC in 2002 significantly improved DUV's resolution to below 40 nm, doubling efficiency and enhancing yield rates [6][7]. - DUV's maturity and widespread deployment, with thousands of machines in operation, cater to various sectors, including consumer electronics and industrial control [11][13]. Market Dynamics - The demand for mature nodes (28 nm and above) is substantial, with production numbers starting from trillions of chips, driven by industries such as automotive and home appliances [9][24]. - DUV's cost-effectiveness, with machines priced at about half that of EUV, and quicker installation times make it accessible for smaller manufacturers [13][15]. Supply Chain and Geopolitical Factors - The U.S. restrictions on EUV technology have led Chinese companies to pivot towards DUV, resulting in a surge in imports, with China importing approximately 100 DUV machines worth €2.1 billion in 2022 [15][17]. - In 2023, Chinese imports of DUV machines reached €5.28 billion, nearly double the previous year's total, indicating a strong demand amidst geopolitical tensions [17][19]. Future Projections - By 2025, China's production capacity for mature chips (28 nm and above) is expected to account for 33% of the global market, up from 27% in 2023, with major contributions from companies like SMIC [22][24]. - The automotive sector is projected to see significant growth, with 70% of the demand for electric vehicles relying on 28 nm chips, further solidifying DUV's importance in the semiconductor landscape [24][26].