Key TakeawaysDutch firm ASML's shares soared as the U.S. reportedly prepares to exclude chip-equipment makers in the Netherlands, Japan, and South Korea from its latest set of trade curbs aimed at China's tech advance.According to Reuters, shipments from several exporters of key chipmaking equipment won’t be included from a Biden administration expansion of the Foreign Direct Product Rule next month.Places whose exports would be affected by the expanded curbs would include Taiwan, Israel, Singapore, and Mal ...

ToplineChip stocks rallied on Wednesday following a report the United States will exempt allies like Japan and the Netherlands from expected trade restrictions on advanced semiconductor technology, paring losses in the wake of a bruising tech stock rout the day before as investors question whether big tech’s big bets on AI are paying off.Semiconductor stocks rallied on Wednesday. Getty Images Key FactsStock for major computer chip companies in Japan, the Netherlands and South Korea soared after Reuters repo ...

Shares of ASML jumped as much as 10% on Wednesday after a Reuters report suggested that the company could be exempted from expanded export restrictions on chipmaking gear to China.Reuters reported on Thursday that the U.S. is considering expanding the so-called foreign direct product rule, but that allies that export key chipmaking equipment — including Japan, the Netherlands and South Korea — will be excluded.Exports to China from countries including Israel, Taiwan, Singapore and Malaysia will be impacted ...

Core Viewpoint - ASML Holding's shares have increased by 13.9% year to date, lagging behind the industry's 16.8% and the Zacks Computer & Technology sector's 17.2% growth, amidst a challenging macroeconomic environment [1] Company Performance - The company's resilience is attributed to its comprehensive product portfolio aligned with customer roadmaps, enabling cost-effective solutions for various applications [1] - ASML's investments, expanding position in the memory market, and increasing design wins are positive indicators for the company [1] - Increased pricing pressure from competitors like Lam Research and Applied Materials poses a risk for ASML [1] Industry Trends - The semiconductor industry is expected to recover in the second half of 2024, driven by the proliferation of artificial intelligence (AI) and advanced digital infrastructure needs [3] - Improving wafer fabrication equipment spending is a significant positive for ASML [3] - Demand for advanced nodes, particularly for 5G, AI, and high-performance computing, is increasing, benefiting ASML's product demand [3][4] Long-Term Growth Factors - ASML is making substantial investments in capacity ramp-up and technology innovation to capitalize on industry trends [5] - The company anticipates growth in memory revenues for 2024, driven by DRAM technology node transitions [5] - ASML's net system bookings in Q2 2024 reached EUR 5.6 billion, with EUR 2.5 billion from EUV bookings, indicating strong demand [5] Revenue and Earnings Estimates - The Zacks Consensus Estimate for ASML's 2024 revenues is $30.18 billion, reflecting a year-over-year growth of 1.3% [7] - The consensus estimate for 2024 earnings is $20.30, indicating a year-over-year decline of 5.7%, but has been revised upward by 0.9% in the past 30 days [7] Market Position and Valuation - ASML is well-positioned to benefit from AI proliferation and global electronics industry trends, enhancing its long-term prospects [7] - The company is currently trading at a forward 12-month P/E of 32.68X, compared to the industry's 27.27X, indicating a stretched valuation [9]

Core Viewpoint - Semiconductor equipment stocks, particularly ASML, are experiencing a correction despite solid fundamentals, driven by tepid Q3 guidance, sector rotation, and political risks [1][2][3] Company Overview - ASML's current stock price is $872.75, down 6.44% [2] - The company has a P/E ratio of 44.57 and a dividend yield of 0.73% [2] - The price target for ASML is set at $1,147.80, indicating a potential upside of 31.5% [4][5] Financial Performance - ASML reported net revenue of $6.73 billion, a 16% decline year-over-year but a 9% increase sequentially [3] - The company experienced a 35% increase in new units sold and a 200% increase in old units sold, although service revenues decreased [3] - Gross profits increased by 19% and net income by 29%, with GAAP EPS at $4.35, up 29% from the previous quarter [3] Market Outlook - Analysts believe the current correction is overblown and expect a solid Buy signal soon, as the robust demand outlook for semiconductor manufacturing equipment remains unchanged [2][4] - The guidance for Q2 is below consensus but is offset by a 55% increase in net bookings driven by EUV sales and expectations for sustained improvement due to AI [4][6] - Analysts project a significant boost in semiconductor spending next year, estimated at $120 billion, particularly focusing on advanced technologies like ASML's EUV systems [6] Stock Performance and Support Levels - ASML shares fell over 17% during the week of the earnings release and may remain under pressure [7] - The stock is currently below the 150-day EMA, a critical support level, with the next support target around $880 [7][8] - If the $880 level holds, a rebound in share prices could begin by late summer or early fall, driven by expectations of sequential improvements and AI-related spending [8]

ASML investors should focus solely on the long-term outlook.ASML (ASML -0.62%) dealt with a slew of bad news when it announced its financial results for the second quarter of 2024. The maker of semiconductor manufacturing equipment faces declining revenue even as customers demand more of the world's advanced chips.That's because restrictions on equipment sales to China reduce its revenue potential. Additionally, rhetoric from presidential candidate Donald Trump suggesting Taiwan may have to pay the U.S. for ...

Radionphoto/iStock via Getty ImagesForeword This article is based on the July 15 Barron’s Weekly article aimed at revealing 48 select stocks for the Mid-Year 2024. That article was: By Lauren R. Rublin July 12, 2024, 11:48 am EDT “You can never be too rich, but can you be too thin? That’s just what many investors have wondered about the current bull market’s exceedingly narrow foundation, composed of just a handful of mega cap tech stocks leading the artificial-intelligence revolution. Their concerns we ...

Investment Rating - The industry rating is "Recommend" and remains unchanged [4] Core Views - ASML's Q2 2024 performance exceeded guidance, driven by strong demand in the semiconductor industry, particularly from AI-related sectors [1][2] - The company expects stronger performance in H2 2024 compared to H1, with the semiconductor industry continuing to recover from the downturn [2][18] - AI, energy transition, and electrification are identified as long-term growth drivers, with the industry expected to enter an upward cycle in 2025 [2][18] Performance Summary Overall Performance - Q2 2024 revenue reached €6.243 billion (QoQ +18.01%, YoY -9.55%), slightly above the guidance range of €5.7-6.2 billion [8] - Gross margin was 51.5% (QoQ +0.5pct, YoY +0.2pct), exceeding the guidance of 50-51% [8] - Equipment sales contributed €4.8 billion, while installed base management revenue was €1.48 billion, slightly above the guidance of €1.4 billion [8] Order and Shipment Details - Q2 2024 equipment orders totaled €5.567 billion, with EUV orders at €2.5 billion and non-EUV orders at €3.1 billion [11] - 73% of orders came from logic customers, while 27% were from memory customers [11] - The company delivered 8 EUV systems in Q2 2024 [11] Revenue Breakdown - Equipment sales in Q2 2024 were €4.761 billion (QoQ +20.05%, YoY -15.08%), with ArFi and EUV technologies contributing 50% and 31% respectively [14] - By region, 49% of revenue came from Mainland China, 28% from South Korea, and 11% from Taiwan [14] - A total of 100 lithography systems were sold in Q2 2024, including 8 EUV systems and 32 ArFi systems [14] Company Guidance Q3 2024 Guidance - Expected Q3 2024 revenue is between €6.7-7.3 billion, with installed base management revenue around €1.4 billion [16] - Gross margin is projected to be 50-51% [16] Full-Year 2024 Guidance - Total revenue for 2024 is expected to be similar to 2023, with a slightly lower gross margin [16] - The company anticipates H2 2024 performance to be significantly stronger than H1, driven by the semiconductor industry's recovery [18] Demand and Supply Outlook Demand Outlook - Logic customers are still digesting the capacity added over the past year, with demand slightly lower than 2023 [18] - Memory customer demand is expected to grow compared to 2023, driven by DRAM technology upgrades such as DDR5 and HBM [18] - AI is identified as the primary driver of semiconductor industry recovery, with strong demand expected to continue into 2025 and 2026 [22][35] Supply Outlook - The company delivered a new batch of NXE:3800E systems in Q2 2024 and is increasing production capacity as planned [19] - Most shipments in H2 2024 will be 3800E systems, with the second High NA EUV system delivered in Q2 2024 [19] - The company aims to achieve a production capacity of 600 DUV and 90 EUV systems, with a medium-term goal of producing 20 High NA EUV systems [25] Key Highlights from Earnings Call Order Composition and Future Outlook - 73% of Q2 2024 orders were related to logic, with no High NA EUV orders in the quarter [20] - The company maintains its 2025 revenue assumption of €30-40 billion [20] Impact of Export Controls - The company continues to see strong demand from Mainland China for mature semiconductor processes [21] - Export controls have not significantly impacted the company's operations, and it remains compliant with US and Dutch regulations [21][27] High NA EUV and AI-Driven Demand - High NA EUV systems are priced at over €350 million each, with strong customer interest and initial data meeting expectations [26][34] - AI is driving demand for both logic and memory, with HBM contributing to increased wafer demand [22][35] Capacity and Revenue Growth - The company expects Q4 2024 revenue to exceed €9 billion, driven by deferred revenue from 3800E systems and strong demand growth [29] - The company is on track to achieve its production capacity goals, with High NA EUV systems expected to contribute significantly in 2025 [25][37]

ASML TodayASMLASML$929.94 +34.57 (+3.86%) 52-Week Range$563.99▼$1,110.09Dividend Yield0.68%P/E Ratio47.49Price Target$1,147.80Add to WatchlistASML Holding N.V. NASDAQ: ASML designs and manufactures extreme ultraviolet (EUV) lithography machines that use light to precision print microscopic patterns on silicon wafers. These gigantic 330,000-pound machines are used to mass-produce the world’s computer chips. ASML is often the barometer of the health of the semiconductor industry. Their lithography machines mu ...

Pixelbizz/iStock Editorial via Getty Images Investment thesis ASML (NASDAQ:ASML) had from the start projected 2024 to be a flat year, before growth would resume in 2025, based on several catalysts such as higher semiconductor industry growth, fab buildouts, and the introduction of new, pricier low- as well as high-NA EUV lithography tools. Since the valuation has remained reflective of a growth stock, with no major sell-offs, this meant ASML has been a stock for the patient this year. With the financial ...