In this video, I talk about one of the best semiconductor stocks to own, ASML (ASML -1.57%), and why now might be the best time to buy shares. Watch the short video to learn more, consider subscribing, and click the special offer link below.*Stock prices used were from the trading day of Jan. 13, 2025. The video was published on Jan. 13, 2025. ...

Group 1 - ASML's stock closed at $727.41, down 1.57% from the previous trading day, underperforming the S&P 500's gain of 0.16% [1] - Over the past month, ASML's shares increased by 2.84%, outperforming the Computer and Technology sector, which declined by 1.29%, and the S&P 500, which fell by 2.2% [1] Group 2 - ASML is set to release its earnings report on January 29, 2025, with an expected EPS of $7.19, representing a 28.39% increase year-over-year, and projected revenue of $9.76 billion, reflecting a 25.3% rise from the same quarter last year [2] Group 3 - Recent adjustments to analyst estimates for ASML indicate changing business trends, with positive revisions suggesting optimism about the company's outlook [3] - The Zacks Rank system, which assesses estimate changes, has shown a correlation with stock price performance, with ASML currently holding a Zacks Rank of 4 (Sell) [4][5] Group 4 - ASML's Forward P/E ratio is 29.32, higher than the industry average of 27.24, indicating that ASML is trading at a premium [6] - The company has a PEG ratio of 2.3, compared to the Semiconductor Equipment - Wafer Fabrication industry's average PEG ratio of 2.66 [7] Group 5 - The Semiconductor Equipment - Wafer Fabrication industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 218, placing it in the bottom 14% of over 250 industries [8]

Core Viewpoint - The Gross Law Firm has issued a notice to shareholders of ASML Holding N.V. regarding a class action lawsuit due to alleged misleading statements and omissions related to the semiconductor industry [1][2]. Summary by Relevant Sections Allegations - The complaint alleges that ASML's management made materially false and/or misleading statements during the class period from January 24, 2024, to October 15, 2024. Key points include: - The issues faced by suppliers in the semiconductor industry were more severe than indicated [1]. - The recovery pace of sales in the semiconductor industry was slower than publicly acknowledged [1]. - Defendants created a false impression of having reliable information on customer demand and growth while downplaying risks from macroeconomic fluctuations and stronger export regulations [1]. - Consequently, the statements made about ASML's business, operations, and prospects lacked a reasonable basis [1]. Next Steps for Shareholders - Shareholders who purchased ASML shares during the specified timeframe are encouraged to register for the class action. Registration includes enrollment in a portfolio monitoring software for status updates [2]. Firm's Mission - The Gross Law Firm aims to protect investors' rights against deceit, fraud, and illegal business practices. The firm is committed to ensuring responsible business practices and seeks recovery for investors who suffered losses due to misleading statements or omissions by companies [3].

Core Insights - Microsoft plans to invest $80 billion in global data centers this year, indicating strong ongoing investment in AI infrastructure [1] - The demand for AI chips is surging, with companies like Nvidia and Broadcom expecting deployments of AI chip clusters exceeding 1 million [1] Semiconductor Industry - Taiwan Semiconductor (TSMC) is a leading contract manufacturer benefiting from the AI chip boom, reporting a 36% revenue increase to $23.5 billion and a 50% rise in earnings per ADR to $1.94 [5] - TSMC's gross margin improved to 57.8% from 54.3% year-over-year, reflecting its pricing power amid competitors' struggles [6] - TSMC's stock is attractively valued with a forward P/E ratio of 19.5 and a PEG ratio of 0.65, indicating potential undervaluation [7] Equipment Manufacturing - ASML is the leader in extreme ultraviolet (EUV) lithography, essential for advanced chip manufacturing, with machines costing over $200 million [8] - ASML's next-generation high-NA EUV machines are priced around $380 million, with Intel and TSMC beginning to explore these technologies [9][10] - ASML holds a monopoly in the EUV market, positioning it for long-term success despite the delayed adoption of its latest technology [10][14]

Company Performance - ASML's stock has increased by more than 5% since October last year, outperforming the S&P 500's gain of over 2% [3] Analyst Background - The author, Yiannis Zourmpanos, is the founder of Yiazou IQ, an AI-driven stock research platform [3] - The author has a background in external/internal auditing and consulting, having worked at Deloitte and KPMG [3] - The author holds a Chartered Certified Accountant qualification and is a Fellow Member of ACCA Global, with BSc and MSc degrees from U.K. business schools [3] Investment Strategy - The investment approach focuses on GARP/Value stocks, targeting high-quality, reasonably priced businesses with strong moats and significant growth potential [3] - The strategy prioritizes fundamentals and seeks stocks trading at a discount to intrinsic value, with a clear margin of safety [3] - The long-term investment horizon is 5-7 years, aiming for wealth accumulation through compounding while emphasizing downside protection [3] - The strategy sometimes takes contrarian views during market uncertainties [3]

AI Stocks Overview - The AI sector has attracted significant investor interest due to its potential for high returns, though determining return potential is challenging given the recent run-up in AI-related stocks [1] Key Players in AI Hardware - ASML and TSMC are critical to AI hardware manufacturing, with ASML holding a monopoly on extreme ultraviolet (EUV) lithography, essential for advanced chip production [2][3] - TSMC relies on ASML's technology to produce advanced chips for clients like Nvidia, AMD, and Qualcomm, despite competition from Samsung and Intel [5] Market Position and Competition - ASML faces potential competition from Japanese companies like Nikon and Canon, which are developing simpler and more cost-effective EUV lithography technology [4] - TSMC dominates the foundry market with a 62% share, making it indispensable despite geopolitical pressures to relocate chip production [6] Financial Performance - ASML reported €19 billion ($19.6 billion) in revenue for the first three quarters of 2024, a 6% yearly decline, with net income dropping to €4.9 billion ($5.0 billion) [8] - TSMC reported $63 billion in revenue for the same period, a 32% yearly increase, with comprehensive income surging 33% to $26 billion [9] Valuation and Investment Potential - ASML has a higher P/E ratio of 39 compared to TSMC's 33, but ASML is currently cheaper relative to its five-year average P/E of 43 [10] - TSMC's higher-than-average earnings multiple of 33 is relatively inexpensive for an AI stock, supported by rapid revenue and earnings growth driven by the AI boom [12] Conclusion - TSMC is more likely to deliver higher returns due to its strong financial performance and growth trajectory, despite its higher valuation compared to ASML [11][12]

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].

Investment Strategy - The investment strategy focuses on high-quality businesses with strong historical bottom-line growth rather than turnarounds [1] - The portfolio targets blue-chip companies with wide moats, competitive advantages, industry-leading market share, and profitability [1] - Companies are selected based on attractive valuations relative to forward growth across US and European markets [1] - Dividend investing is primarily about free cash flow rather than yield chasing [1] Portfolio Composition - The portfolio includes long positions in LVMH and ASML through stock ownership, options, or other derivatives [1] - The strategy aims for strong capital appreciation and aggressive dividend growth [1] Analyst's Role - The analyst leverages their role as a Financial Analyst at a Fortune 500 firm to build a market-beating portfolio [1] - The investment horizon is 30 years until retirement [1]

Core Viewpoint - A class action lawsuit has been filed against ASML Holding N.V. and certain senior executives for alleged violations of federal securities laws, particularly concerning misleading statements about the impact of new export controls on the company's financial outlook [1][2][3]. Group 1: Lawsuit Details - The lawsuit is pending in the U.S. District Court for the Southern District of New York, titled Matar v. ASML Holding N.V., et al., No. 24-cv-9908 [2]. - Investors have until January 13, 2025, to request to be appointed to lead the case [2]. Group 2: Company Performance and Allegations - ASML is a key supplier in the semiconductor industry, providing photolithography machines essential for chip manufacturing [3]. - The complaint alleges that ASML misled shareholders by claiming that new export controls would not materially affect its financial outlook and that sales recovery was on track [3]. Group 3: Financial Impact - On October 15, 2024, ASML reported earnings significantly below expectations, attributing this to a slower-than-anticipated market recovery, resulting in a 16% drop in stock price from $872.27 to $730.43 per share [4]. - Following an earnings call on October 16, 2024, where the company cited cautious customer behavior and declining sales to China, the stock price fell an additional 6.4%, closing at $683.52 per share [5].

Core Viewpoint - A class action lawsuit has been filed against ASML Holding N.V. and certain senior executives for alleged violations of federal securities laws, claiming misleading statements regarding the impact of new export controls on the company's financial outlook [1][2][3]. Group 1: Lawsuit Details - The lawsuit is pending in the U.S. District Court for the Southern District of New York, titled Matar v. ASML Holding N.V., et al., No. 24-cv-9908 [2]. - Investors have until January 13, 2025, to request to be appointed to lead the case [2]. - The complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of investors in ASML ordinary shares, call options, and/or put options [2]. Group 2: Company Performance and Market Reaction - ASML is a key supplier in the semiconductor industry, providing photolithography machines essential for chipmakers [3]. - On October 15, 2024, ASML reported earnings significantly below expectations, attributing this to a slower-than-expected market recovery, leading to a 16% drop in stock price from $872.27 to $730.43 per share [4]. - During the earnings call on October 16, 2024, ASML indicated that the decline in sales to China would negatively affect gross margins, resulting in a further 6.4% decline in stock price to $683.52 per share [5].