Chip Giant ASML Gets New Price Targets With Big Upside

Core Viewpoint - ASML, a key player in the semiconductor industry, reported strong revenue growth but faced a significant drop in net bookings, leading to a decline in share price despite beating earnings expectations [2][4][6]. Financial Performance - In Q1 2025, ASML reported a 46% year-over-year revenue increase, totaling approximately €7.7 billion (about $8.77 billion), and earnings per share of €6 (around $6.31), surpassing estimates by approximately 5% [3]. - The company reaffirmed its full-year 2025 revenue outlook of €30 to €35 billion (approximately $33 to $38.6 billion) despite slightly below-expectation Q2 revenue guidance [4]. Net Bookings - ASML experienced a 44% drop in net bookings compared to Q4 2024, reporting €3.9 billion (approximately $4.45 billion) in bookings, nearly €1 billion (about $1.14 billion) below expectations [6]. - The fluctuation in bookings is common for ASML, as seen in the previous year when bookings fell nearly 61% from Q4 2023 to Q1 2024 [6][7]. Market Sentiment - The market tends to overreact to bookings fluctuations, which can lead to significant share price movements [7]. - ASML's CFO indicated that bookings do not accurately reflect business momentum, especially given the high cost of its machines, such as the latest EUV product priced at around $380 million [7]. Future Outlook - ASML projects substantial growth through 2030, with revenues expected to increase by 50% to 105% compared to 2024 levels, and gross margins expanding by 180 to 580 basis points [10]. - The company has authorized a share buyback of up to 10% over the next 18 months and maintains a dividend yield of around 1% [11]. Analyst Ratings - ASML currently holds a Moderate Buy rating among analysts, with an average price target of $906.00, indicating a potential upside of 34.28% from the current price [10][12].