ASML Stock Nearing Bottom: Is Now the Time to Buy?

Core Viewpoint - Semiconductor equipment stocks, particularly ASML, are experiencing a correction despite solid fundamentals, driven by tepid Q3 guidance, sector rotation, and political risks [1][2][3] Company Overview - ASML's current stock price is $872.75, down 6.44% [2] - The company has a P/E ratio of 44.57 and a dividend yield of 0.73% [2] - The price target for ASML is set at $1,147.80, indicating a potential upside of 31.5% [4][5] Financial Performance - ASML reported net revenue of $6.73 billion, a 16% decline year-over-year but a 9% increase sequentially [3] - The company experienced a 35% increase in new units sold and a 200% increase in old units sold, although service revenues decreased [3] - Gross profits increased by 19% and net income by 29%, with GAAP EPS at $4.35, up 29% from the previous quarter [3] Market Outlook - Analysts believe the current correction is overblown and expect a solid Buy signal soon, as the robust demand outlook for semiconductor manufacturing equipment remains unchanged [2][4] - The guidance for Q2 is below consensus but is offset by a 55% increase in net bookings driven by EUV sales and expectations for sustained improvement due to AI [4][6] - Analysts project a significant boost in semiconductor spending next year, estimated at $120 billion, particularly focusing on advanced technologies like ASML's EUV systems [6] Stock Performance and Support Levels - ASML shares fell over 17% during the week of the earnings release and may remain under pressure [7] - The stock is currently below the 150-day EMA, a critical support level, with the next support target around $880 [7][8] - If the $880 level holds, a rebound in share prices could begin by late summer or early fall, driven by expectations of sequential improvements and AI-related spending [8]