Will ASML Be a Trillion-Dollar Stock by 2030?

Company Overview - ASML is a semiconductor equipment company specializing in lithography machines, particularly extreme ultraviolet (EUV) machines, which are essential for manufacturing advanced semiconductors [5][12] - The company currently has a market cap of $285 billion and is the 31st largest company globally [3] Market Potential - The demand for advanced semiconductors is expected to grow significantly, driven by applications in smartphones and data centers for artificial intelligence (AI) [6][7] - ASML's revenue has increased by 266% over the past decade, indicating strong growth potential [6] Financial Performance - ASML reported sales of approximately 7.5 billion euros last quarter, up from 6.2 billion euros a year prior [7] - The company generates a net income of $7.5 billion, with a target of reaching $25 billion in net income to achieve a market cap of $1 trillion [8][9] Growth Projections - Management anticipates semiconductor market spending to grow by 9% annually, with ASML aiming for 12% annual revenue growth over the next five years, potentially reaching $50 billion in revenue [9] - Achieving a net income margin of 50% to hit the $25 billion target is considered highly unlikely [9] Investment Considerations - Despite the unlikelihood of reaching a $1 trillion market cap by 2030, ASML is viewed as a strong business due to its monopoly on advanced lithography equipment [12] - The stock currently trades at a P/E ratio of 37, which aligns with its long-term average, suggesting it is not excessively priced [12]