Prediction: This Will Be the First Artificial Intelligence (AI) Company to Split Its Stock in 2025

Core Viewpoint - Stock splits have become popular in the technology sector as companies aim to make their shares more accessible to a broader range of investors, with ASML potentially considering a split in 2025 due to its underperformance compared to the market [1][3]. Company Overview - ASML has executed four stock splits since going public in 1995, with the last being an 8-for-9 reverse split in 2007 [4]. - The company's stock price has increased over 1,900% since the last split, currently trading around $764, indicating a potential for another split [5]. Recent Performance - ASML's stock has underperformed, gaining only 22% over the past couple of years compared to a 94% increase in the broader semiconductor sector [3]. - The company faced challenges in the second half of 2024, including concerns over sales restrictions to China and weaker-than-expected orders [6]. Revenue Guidance - ASML's 2025 revenue guidance is between 30 billion euros and 35 billion euros ($31.1 billion to $36.3 billion), which is on the lower end of previous forecasts [7]. - Management maintains a long-term growth outlook, supported by catalysts such as AI, with a 2030 revenue target of 44 billion euros to 60 billion euros [8]. Growth Projections - Assuming ASML achieves the midpoint of its 2025 guidance, the company could see a compound annual growth rate (CAGR) of nearly 10% over the next five years [8]. - The gross margin is expected to improve from 51%-53% in 2025 to 56%-60% by 2030, indicating potential for increased profitability [9]. Market Demand - Demand for ASML's extreme ultraviolet (EUV) lithography systems is projected to remain strong, with chipmakers expected to increase spending at a double-digit CAGR from 2025 to 2030 [10]. - The EUV lithography market is estimated to generate $22.7 billion in annual revenue by 2029, up from $12.2 billion last year, with ASML holding a near-monopoly in this space [12]. Earnings Forecast - Analysts predict a 26% increase in earnings per share (EPS) for ASML in 2025, following an estimated 4% decline in 2024 [13]. - The company is expected to maintain earnings growth of 25% or more in 2026, with the stock trading at 31 times forward earnings, slightly below the Nasdaq-100 index's multiple of 32 [14].