ASML, Broadcom, and Micron could head even higher over the next few years.Many semiconductor stocks rallied over the past year as the explosive growth of the artificial intelligence (AI) market drove many companies to upgrade their data center chips. But with the market hovering near its record highs, investors might be reluctant to add some of these high-flying stocks to their portfolios.However, the market leaders that have clear competitive advantages, staying power, and wide moats should continue to soa ...

ASML earnings were overshadowed by the prospect of more restrictions on sales to China and comments by former President Trump.Shares of semiconductor giants ASML Holdings (ASML -0.85%), Micron Technology (MU -1.72%), and Advanced Micro Devices (AMD -2.30%) fell this week, down 14.8%, 12.1%, and 14.2%, respectively, as of the end of the trading day Thursday, according to data from S&P Global Market Intelligence.There was a slew of semiconductor news this week, coming both from within and outside these compan ...

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Major computer chip manufacturers like Nvidia and TSMC continued to slump Thursday as warnings from both President Biden and Republican nominee Donald Trump fueled renewed geopolitical concerns among investors.The selloff occurred after the Biden administration threatened severe restrictions on exports by foreign chipmakers to China, while former President Donald Trump rattled the market by suggesting Taiwan should pay the US to defend against China’s aggression.Taiwan Semiconductor Manufacturing Company sh ...

Pixelbizz/iStock Editorial via Getty Images I issued a “Strong Buy” rating on ASML Holding N.V. (NASDAQ:ASML) in my previous coverage published in March 2024, pointing out the growth propelled by the explosive demands for high bandwidth memory (HBM) in AI computing. The company released its Q2 FY24 result on July 17th with a recovery in its new bookings. The stock price fell more than 10% amidst concerns over tighter export restrictions to China. I think the near-term risk is quite high and uncertain. T ...

Financial Data and Key Metrics Changes - Total net sales for Q2 2024 were EUR 6.2 billion, slightly above guidance [8] - Net system sales reached EUR 4.8 billion, comprising EUR 1.5 billion from EUV sales and EUR 3.3 billion from non-EUV sales [8] - Gross margin was 51.5%, exceeding guidance due to higher immersion system sales [9] - Net income for Q2 was EUR 1.6 billion, representing 25.3% of total net sales, resulting in an EPS of EUR 4.01 [9] - Free cash flow improved to EUR 386 million, although pressures remain due to customer support and higher inventory levels [10] Business Line Data and Key Metrics Changes - Logic accounted for 54% of net system sales, while Memory contributed 46% [8] - Installed base management sales were EUR 1.48 billion, slightly above guidance [9] - Q2 net system bookings totaled EUR 5.6 billion, with 73% from Logic and 27% from Memory [10] Market Data and Key Metrics Changes - The backlog at the end of Q2 2024 was approximately EUR 39 billion [10] - The semiconductor industry is showing signs of recovery, with improved lithography tool utilization among Logic and Memory customers [13] Company Strategy and Development Direction - The company expects EUV revenue growth in 2024, with plans to recognize revenue from one to two High NA systems [15] - The focus remains on preparing for future demand, particularly in 2025, driven by AI and new fabs being constructed globally [17] - The company aims to maintain a similar level of revenue from the Installed Base business compared to last year, anticipating customer upgrades in preparation for 2025 [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledges macroeconomic uncertainties but remains confident in long-term growth opportunities, particularly in AI and semiconductor end markets [18] - The company expects a stronger second half of 2024 compared to the first half, with revenue anticipated to be similar to last year [14] - The anticipated annualized effective tax rate for 2024 is between 16% and 17% [11] Other Important Information - A final dividend of EUR 1.75 per ordinary share was paid in Q2 2024, with a total dividend for 2023 of EUR 6.10 per share [12] - The company purchased 106,000 shares for a total of EUR 96 million in Q2 2024 [12] Q&A Session Summary Question: Bookings composition and outlook for EUV orders - The majority of bookings (73%) were related to Logic, indicating strong demand. No High NA bookings were included in the EUR 2.5 billion EUV bookings for the quarter [22] - The company confirmed expectations for 2025 revenues to be between EUR 30 billion and EUR 40 billion, with more specific guidance to be provided at the upcoming Capital Markets Day [23] Question: Implications of potential trade restrictions on China - Management refrained from commenting on rumors but emphasized the importance of the mature semiconductor market, which remains significant for revenue [25] Question: Expectations for 2-nanometer orders - The company indicated a healthy start for the N2 foundry business, with additional orders expected as customers ramp up production [29] Question: DRAM adoption of EUV layers - The company expects continued growth in EUV usage across all nodes, with gradual adoption by customers [35] Question: Capacity preparation for new fabs - Most of the impact from new fabs is expected to be felt after 2025, with preparations being made to meet future demand [56] Question: Revenue expectations for the second half of 2024 - The company anticipates a progressive buildup of revenue, with around EUR 1 billion in deferred revenue expected to be recognized in the second half [59]

Key TakeawaysNvidia, ASML, and other chip stocks tumbled Wednesday following reports of potential government moves that could negatively impact the sector.The Biden Administration is reportedly considering tightening restrictions on exports of semiconductor equipment to China.Separately, former President Donald Trump said in an interview with Bloomberg Businessweek that Taiwan should pay the U.S. for defense, raising concerns about how geopolitical tensions could affect the chip industry. Nvidia (NVDA), Qua ...

Geopolitical risks outweigh solid results.Semiconductor equipment manufacturer ASML (ASML -11.44%) reported a better-than-expected quarter, but the results were overshadowed by increasing geopolitical concerns.Shares of the Dutch tech company traded down 10% as of 10:30 ET on reports the United States is considering tighter restrictions on tech sales to China.Strong quarter, tough questionsASML makes the machines that make semiconductor chips, providing the technology that makes tech trends including artifi ...

Dutch chip production equipment giant ASML (NASDAQ:ASML) and shares of all chipmakers are being dragged down today on a warning about President Joe Biden and his administration’s new export restrictions to China. Geopolitical tensions are also hurting chip stocks after Republican candidate former President Donald Trump said that Taiwan should pay for the U.S. defense of its island.ASML stock is down 10% as of this writing at $959 per share and a market capitalization below $400 billion. However, shares are ...

ASML (ASML) Q2 2024 Earnings Call July 17, 2024 09:00 AM ET Speaker0Good day and thank you for standing by. Welcome to the ASML 20 24 Second Quarter Financial Results Conference Call on July 17, 2024. At this time, all participants are in a listen only mode. After the speakers' introduction, there will be a question and answer To ask a question in the session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised.Please be advised that to ...