Core Insights - The Bristlemoon Global Fund achieved a 5.0% return for the September 2025 quarter and a cumulative 19.3% return since inception, net of fees [2] - Key contributors to performance included AppLovin, ASML, and Alphabet, while PAR Technology Corporation, Salesforce, and Hemnet detracted from performance [3] Investment Approach - The fund focuses on compounding capital through investments in high-quality, competitively advantaged businesses with specific traits, including the ability to forecast future earnings and reinvest at high rates of return [5][7] - The portfolio consists of 95.2% long positions and 9.5% short positions, with a net exposure of 85.7% [5] Performance Analysis - The fund's top five long positions as of September 30, 2025, include AerCap Holdings, Alphabet, AppLovin, Hemnet Group, and Uber Technologies [6] - The fund's monthly performance showed fluctuations, with notable returns in September 2025 [6] ASML Holding N.V. - ASML is a monopoly supplier of lithography machines essential for semiconductor fabrication, particularly in the AI and computing sectors [18] - Despite a significant drawdown in stock price, the fund believes the bearish narratives surrounding ASML's growth prospects are misguided, emphasizing the ongoing demand for its technology [20][21] - Concerns regarding demand normalization in China and the transition to new transistor architectures are addressed, with the fund asserting that ASML's market position remains strong [22][24][35] Alphabet Inc - Alphabet has been perceived as struggling to innovate, but the fund argues that recent product launches and advancements in AI demonstrate its competitive edge [40][41] - The narrative of Google Search being disrupted by AI is countered with data showing stable growth in search revenue and the effectiveness of AI Overviews in monetization [51][53] - The company is positioned to leverage its AI capabilities and advertising scale to maintain its market leadership [59] Synopsys Inc - Synopsys is a leading vendor of electronic design automation tools, benefiting from increased design starts in the semiconductor industry [61] - A recent stock price decline following earnings results is viewed as an overreaction, presenting a buying opportunity for a company with strong fundamentals [63][66] PAR Technology Corporation - PAR has faced significant stock price volatility, with a 44% decline attributed to disappointing earnings and growth guidance [68] - The company is focusing on long-term value creation by pursuing large contracts with major clients, which could significantly enhance its annual recurring revenue [75][77] - Despite short-term challenges, the fund maintains a positive outlook on PAR's potential for recovery and growth [83]

Core Viewpoint - ASML Holding N.V. has experienced a significant stock price decline of 25.1% over the past year, underperforming the broader market and major semiconductor companies, despite its strong market position and financial performance [1][3]. Company Performance - ASML's stock underperformance is attributed to macroeconomic pressures and company-specific challenges, including a broader tech sector sell-off and weakening semiconductor demand [4][5]. - The Dutch government's export restrictions on ASML's advanced lithography tools to China have hampered growth prospects, as China accounted for 41% of ASML's lithography shipments in 2024 [6]. - ASML's forward P/E ratio stands at 27.92, which is higher than the Zacks Computer and Technology sector average of 23.92, raising valuation concerns among investors [7]. Technological Leadership - ASML maintains a near-monopoly on extreme ultraviolet (EUV) lithography, essential for producing advanced chips at 3nm and below, positioning it as a key enabler in semiconductor manufacturing [9][11]. - The company's High-NA EUV technology, designed for sub-2nm nodes, represents significant long-term potential, despite slower-than-expected adoption [10]. Financial Performance - ASML reported €9.26 billion in net sales for Q4 2024, a 24% year-over-year increase, with net income rising 30% to €2.69 billion and EPS growing 30% to €6.85 [12]. - The gross margin expanded by 90 basis points year-over-year to 51.7%, reflecting strong cost management and productivity improvements [13]. - For 2025, ASML expects a 15% revenue growth, driven by rising demand for EUV and DUV lithography systems, along with anticipated margin expansions [14]. Order Backlog and Revenue Visibility - ASML has a record-high order backlog of €36 billion, providing strong revenue visibility, with €7.1 billion in new orders booked in Q4 2024 [15][16]. - The demand for ASML's lithography tools is driven by the AI boom and the need for next-generation chip production [17][18]. Conclusion - Despite facing near-term challenges, ASML's technological leadership, robust financials, and substantial order backlog indicate strong long-term growth potential, making it a compelling hold for investors [19][20].

Financial Data and Key Metrics Changes - In 2023, ASML achieved total revenue of €27.6 billion, a 30% increase compared to the previous year, despite the semiconductor industry experiencing an 8% decline [15][17] - The gross margin improved to 51.3%, with net income reported at €7.8 billion and net bookings at €20 billion [17][25] - The company returned €3.3 billion to shareholders, including €2.3 billion in dividends and €1 billion in share buybacks [18][37] Business Line Data and Key Metrics Changes - The Logic business saw substantial growth, increasing from approximately €10 billion in 2022 to nearly €16 billion in 2023, driven by demand for advanced logic and mature technologies [18][20] - EUV technology sales grew by 30%, while DPV sales surged by 60%, indicating strong demand for immersion technology [17][18] - The applications business experienced a slight decline, attributed to its shorter lead time and lack of significant backlog [18] Market Data and Key Metrics Changes - ASML's sales in China increased significantly, rising from 14% to 29% of total sales, reflecting the company's ability to meet previously unmet demand in the region [21] - The company noted that the semiconductor market is expected to grow from €600 billion to around €1 trillion by 2030, indicating a robust long-term outlook for the industry [55] Company Strategy and Development Direction - ASML is preparing for significant growth in 2025, viewing 2024 as a transition year with expected revenue levels similar to 2023 [32][33] - The company is focused on building capacity and hiring talent to meet anticipated demand, particularly in advanced technologies [33][56] - ASML emphasizes the importance of sustainability and ESG initiatives, aiming for net-zero greenhouse gas emissions by 2040 [59][64] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the current downturn in the semiconductor industry but expressed confidence in a recovery, citing improved customer dynamics and tool utilization [34][35] - The company expects a stronger second half of 2024, driven by a healthy order intake and improved market conditions [34][36] Other Important Information - ASML's R&D expenditure reached €4 billion in 2023, reflecting the company's commitment to innovation and technology development [25][30] - The company reported a healthy cash balance of around €7 billion, providing resilience amid industry challenges [26] Q&A Session: All Questions and Answers Question: Impact of US Government Restrictions on Advanced DUV Machines - Management indicated that the restrictions would not significantly affect the 2025 or 2030 financial targets, as the impact is limited to specific factories under export control [80][89] Question: China's Advancements in DUV Technology - Management clarified that while China can technically achieve 5nm chips using multi-patterning, the economic feasibility for high-volume manufacturing remains a challenge [91][92] Question: Adoption of High NA EUV Technology - Management expressed confidence in the adoption of high NA EUV technology, noting that initial customer interest is strong, and the adoption will be gradual [94][96] Question: Free Cash Flow and Backlog Recovery - Management acknowledged that free cash flow is under pressure due to lower contract liabilities but expects a recovery in backlog as orders return [82][104] Question: Expansion Potential in Eindhoven - Management confirmed ongoing discussions with the Dutch government regarding expansion plans and emphasized the need for a supportive investment climate [83][102]