Up 50% in 2025, Should You Buy ASML Stock Right Now?

Core Viewpoint - ASML's stock has reached a record high, reflecting strong performance driven by the AI market, despite facing challenges in China [1][6]. Group 1: Company Overview - ASML is the largest producer of lithography systems, essential for etching circuit patterns on silicon wafers, and the sole producer of extreme ultraviolet (EUV) lithography systems [3]. - The company's EUV systems, costing between $200 million and $400 million, are utilized by leading foundries like TSMC, Samsung, and Intel for advanced chip production [4]. Group 2: Market Position and Challenges - ASML's monopoly on critical chipmaking technology positions it as a key player in the semiconductor market, but it faces restrictions on selling EUV systems to Chinese manufacturers since 2019, with increasing pressure on advanced DUV system sales [5]. - Despite a slowdown in growth in China, which accounted for 41% of net system sales in 2024, the expansion of the AI market has led to increased orders from non-Chinese customers [6]. Group 3: Financial Performance - In 2023, ASML's sales grew by 30%, gross margins expanded, and earnings per share (EPS) increased by 41%, driven by the growth in high-performance computing, cloud, data centers, and AI markets [10]. - The transition from low-NA to high-NA EUV systems is expected to significantly enhance revenues and margins in the coming years [7].