Key Takeaways ASML shares have jumped 44.9% YTD, outpacing the broader tech sector and several semiconductor peers.ASML's leadership in EUV and progress in High-NA systems underpin long-term demand and customer adoption.ASML posted higher margins and Q4 revenue guidance of 9.2B-9.8B euros, with 2025 sales growth near 15%.ASML Holding (ASML) shares have been highly volatile in 2025 so far amid the ongoing macroeconomic challenges and geopolitical issues. Despite massive fluctuations, ASML stock has soared 44 ...

Key Points TSMC is the world’s largest and most advanced contract chipmaker. ASML provides the lithography tools that enable TSMC to produce those chips. One of these linchpins faces more headwinds than the other. 10 stocks we like better than Taiwan Semiconductor Manufacturing › TSMC (NYSE: TSM) and ASML (NASDAQ: ASML) are both linchpins of the semiconductor market. Taiwan Semiconductor Manufacturing (TSMC) is the world's largest and most advanced contract chipmaker. ASML is the largest producer ...

Core Insights - ASML Holding N.V. is the only manufacturer of extreme ultraviolet (EUV) lithography systems, essential for producing sub-4nm semiconductors that are critical for AI, data centers, and advanced consumer electronics [1][10] - The company expects a revenue growth of approximately 15% for the full year, driven by increasing demand for EUV technology in logic and DRAM segments, particularly for sub-3nm nodes [12][11] - ASML's total addressable market (TAM) is projected to exceed $1 trillion by 2030, with lithography tools accounting for €40-60 billion of annual equipment demand [13][14] Technology Overview - ASML's EUV platform utilizes 13.5nm wavelength light produced by tin plasma lasers, allowing for finer resolution and enabling next-generation chips for AI and quantum computing [4][5] - The company’s High-NA EUV systems provide up to 70% finer resolution compared to previous generations, with each machine costing over €350 million [4][10] - EUV systems are critical for advanced logic and memory applications, while DUV systems are still widely used for less critical layers in semiconductor manufacturing [8][9] Financial Outlook - ASML's earnings per share (EPS) estimates for 2025 have increased from $28.15 to $29.08, and next year's profit projection has risen from $29.15 to $30.14 [10] - The company anticipates maintaining a gross margin of around 52% as it capitalizes on the growing demand for EUV systems [11][12] - The global lithography equipment market is expected to grow from $27.8 billion in 2025 to approximately $43.7 billion by 2030, reflecting a compound annual growth rate (CAGR) of 6-8% [15] Market Dynamics - The semiconductor industry is projected to surpass $1 trillion in total sales by 2030, with ASML positioned as a key player due to its monopoly in EUV technology [14][19] - AI-related data center, high-performance computing (HPC), and networking chips are expected to account for around 40% of semiconductor demand by 2030, significantly driving EUV system sales [16] - Bank of America has raised its forecast for global semiconductor sales to nearly $1 trillion by 2027, indicating a robust growth trajectory for the industry [17][18]

Core Insights - Wall Street favors long-term investment strategies over market timing, emphasizing the importance of buying and holding high-quality companies that benefit from strong secular trends [1] Company Overview - ASML Holding is a key player in the global semiconductor industry, providing essential lithography systems for chip manufacturers [2] Financial Performance - In Q3, ASML reported total net sales of 7.5 billion euros and net income of 2.1 billion euros, with net sales remaining mostly flat year-over-year [3] Future Outlook - The company is preparing for the commercial rollout of its High-NA EUV lithography system, which features a 0.55 numerical aperture, allowing for higher resolution circuit pattern etching [4] - ASML anticipates increased orders for High-NA EUV systems starting in the second half of 2026, with shipments expected to begin in 2028 [5] Market Demand - ASML is positioned to benefit from the growing demand for advanced computing and memory chips, particularly in the context of AI infrastructure development [6]

Financial Performance - ASML reported total net sales of €7.5 billion in Q3 2025[1] - The company's net income for Q3 2025 was €2.1 billion[1] - Gross margin for Q3 2025 was 51.6%[6] - Net system sales in Q3 2025 amounted to €5.6 billion[6] - Installed Base Management sales reached €2.0 billion in Q3 2025[6] - Net bookings for Q3 2025 were €5.4 billion, including €3.6 billion from EUV bookings[6] Outlook - ASML anticipates full-year 2025 total net sales growth of around 15% with a gross margin of approximately 52%[1] - Q4 2025 total net sales are expected to be between €9.2 billion and €9.8 billion[26] Market and Strategy - The semiconductor industry is projected to exceed $1 trillion in revenue by 2030, driven by AI adoption[4] - ASML sees an opportunity to achieve annual revenue between approximately €44 billion and €60 billion by 2030, with a gross margin between approximately 56% and 60%[4]

Core Viewpoint - ASML, the leading producer of lithography systems, faces near-term challenges despite a strong performance in 2023, with a significant slowdown in 2024 due to various market pressures and geopolitical factors [3][4][10] Group 1: Company Performance - In 2023, ASML's net sales surged by 30% driven by increased shipments of DUV and EUV systems and a rise in service revenues as chipmakers ramped up AI chip production [3] - For 2024, ASML's net sales growth is projected at only 3%, with gross margins flatlining and EPS declining by 3% due to tough comparisons and reduced demand for non-AI chips [4] - Despite the slowdown in the first half of 2024, ASML's net sales and EPS showed double-digit growth over the past four quarters, largely supported by AI demand in the DRAM memory chip market [5] Group 2: Financial Metrics - ASML's financial metrics for upcoming quarters indicate a mixed outlook: Q2 2024 shows a net sales decline of 9.5%, while Q3 and Q4 are expected to rebound with growth rates of 11.9% and 28%, respectively [6] - Gross margins are projected to fluctuate around 51.5% to 54% from Q2 2024 to Q1 2025, with EPS growth expected to recover significantly in Q1 2025 at 92.9% [6] Group 3: Market Outlook - Analysts forecast ASML's revenue and EPS to rise by 14% and 25%, respectively, in the current year, with a compound annual growth rate (CAGR) of 10% for revenue and 16% for EPS from 2024 to 2027 [7] - The company anticipates a 15% increase in net sales for the full year, with gross margins expected to rise from 51.3% to approximately 52% [6] Group 4: Challenges and Risks - ASML faces significant near-term challenges, including tightened export controls from the Chinese government and potential new tariffs from the U.S. government, which could impact sales forecasts [9][10] - The stock is currently valued at 34 times next year's earnings, raising concerns about whether the current valuation reflects too much optimism regarding AI growth [8]

Core Insights - ASML Holding N.V. (ASML) shares have increased by 15.9% over the past month, outperforming the broader Zacks Computer and Technology sector, which rose by 6.2% [1] - ASML's stock has also surpassed several semiconductor peers, including Intel, AMD, and NVIDIA, which saw lower or negative returns during the same period [1] Group 1: Technological Leadership - ASML holds a near-monopoly on extreme ultraviolet (EUV) lithography, essential for producing advanced chips at 3nm and below, positioning the company as a key enabler for major chipmakers like TSMC, Samsung, and Intel [3][4] - The company's High Numerical Aperture (NA) EUV technology is designed for sub-2nm nodes and is critical for the future of chip manufacturing, with significant long-term potential despite slower-than-expected adoption [4] - ASML made progress in High NA EUV during Q2 with the shipment of the first EXE:5200B system, which is crucial for enabling the 1.4nm node and beyond, with high-volume manufacturing expected to begin in 2026-2027 [5] Group 2: Market Demand and AI - ASML is well-positioned to benefit from the AI revolution, which is driving demand for advanced semiconductors, as AI workloads require cutting-edge GPUs and high-bandwidth memory [6] - The demand for smaller and more powerful chips aligns with ASML's offerings, as its EUV and High-NA EUV machines are vital for manufacturing these advanced chips [6] Group 3: Financial Performance and Outlook - ASML reported a strong Q2 with a 23% revenue growth and a 47% increase in EPS [8][10] - Despite strong quarterly results, management expressed uncertainty about growth in 2026, citing customer hesitation and ongoing market uncertainty [11] - The company acknowledged that U.S.-China tariff discussions are negatively impacting customer capital spending timelines, which may delay orders and revenue recognition [12] Group 4: Guidance and Valuation - ASML issued disappointing guidance for Q3, expecting revenues between €7.4 billion and €7.9 billion, indicating only a 2% year-over-year increase [13] - The expected gross margin for Q3 is projected to be in the 50-52% range, down from 53.7% in Q2, primarily due to margin-dilutive High NA system revenues [14] - ASML's stock trades at a premium valuation with a forward 12-month P/E ratio of 30.63, higher than the sector average of 28.69, but lower than some peers like Intel and NVIDIA [15][18] Group 5: Investment Recommendation - Given ASML's leadership in EUV technology and its essential role in future chipmaking, the company remains well-positioned for growth [19] - However, management's uncertainty regarding the 2026 growth outlook and the premium valuation suggest a cautious approach, recommending to hold the stock for now [19]

Group 1: AI Market Overview - The AI market is projected to grow to $4.8 trillion annually by 2033 according to a United Nations Trade and Development report [1] - Major tech companies are incorporating AI into their products, making it a driving force in the tech market since the launch of ChatGPT in 2022 [1] Group 2: ASML's Position in the Semiconductor Industry - ASML is identified as one of the AI stocks best positioned for long-term success due to its wide moat in the semiconductor industry [2] - ASML manufactures lithography systems essential for chip production, particularly for advanced AI chips using extreme ultraviolet (EUV) lithography systems [5][6] - ASML holds over 90% of the lithography market share and is the only supplier of EUV lithography equipment, making it difficult for competitors to enter this market [6] Group 3: Clientele and Growth Potential - Major chipmakers such as Taiwan Semiconductor Manufacturing, Intel, and Samsung rely on ASML's equipment, indicating strong demand for its products [7] - With its competitive advantages, ASML is expected to deliver strong growth over the next decade [7] Group 4: Valuation and Investment Consideration - ASML is trading at 27 times forward earnings, which is considered reasonably valued compared to other AI stocks [8] - The company is recommended as a quality AI investment opportunity for portfolio consideration [8]

Core Insights - ASML Holding and Applied Materials are key players in the semiconductor equipment industry, with ASML leading in lithography systems and Applied Materials excelling in deposition, etching, and process control [1][2] ASML Holding - ASML is crucial in the semiconductor value chain due to its monopoly in EUV lithography, essential for advanced chip manufacturing [2] - In Q2 2025, ASML reported a revenue growth of 23% and a 47% increase in earnings per share, but management expressed concerns about growth prospects for 2026 [3][4] - The company acknowledged that U.S.-China tariff discussions are negatively impacting customer capital spending, which may delay orders and revenue recognition [5] - ASML's guidance for Q3 indicates expected revenues between €7.4 billion and €7.9 billion, reflecting a year-over-year growth of 14.6%, significantly lower than previous quarters [9] - The expected gross margin for Q3 is projected to be in the 50-52% range, down from 53.7% in Q2, primarily due to margin-dilutive revenues [10] Applied Materials - Applied Materials has a diversified portfolio across semiconductor manufacturing equipment, allowing it to better navigate industry fluctuations [11] - The company is well-positioned to benefit from AI-driven semiconductor technology, with revenues from advanced semiconductor nodes exceeding $2.5 billion in fiscal 2024 and expected to double in fiscal 2025 [12][13] - In Q2 of fiscal 2025, Applied Materials reported a 14.4% increase in non-GAAP EPS and a 6.8% rise in revenues, with guidance for Q3 indicating a 6.2% revenue growth and a 10.8% increase in non-GAAP EPS [14] Comparative Analysis - Year-to-date, ASML shares have decreased by 0.5%, while Applied Materials shares have increased by 10.2% [17] - ASML is trading at a forward earnings multiple of 24.33, higher than Applied Materials' 18.14, suggesting that Applied Materials is more reasonably priced given its stronger near-term momentum [18] Conclusion - Applied Materials is currently viewed as the better investment option due to stronger near-term earnings stability, broader product exposure, and more attractive valuation compared to ASML [20] - AMAT holds a Zacks Rank 2 (Buy), while ASML has a Zacks Rank 4 (Sell) [21]

Financial Highlights - Q2 2025 total net sales reached €7.7 billion[1] - Q2 2025 net income was €2.3 billion[1] - Gross margin for Q2 2025 was 53.7%[6] - Net system sales for Q2 2025 were €5.6 billion[6] - Installed Base Management sales for Q2 2025 were €2.1 billion[6] - Net bookings for Q2 2025 totaled €5.5 billion, including €2.3 billion in EUV bookings[6] Outlook and Growth - The company anticipates full-year 2025 total net sales growth of around 15% with a gross margin of approximately 52%[1] - The semiconductor industry is expected to surpass $1 trillion in revenue by 2030[4] - The company sees an opportunity to achieve 2030 annual revenue between approximately €44 billion and €60 billion with a gross margin between approximately 56% and 60%[4] Shareholder Returns - The first quarterly interim dividend over 2025 will be €1.60 per ordinary share[23] - In Q2 2025, the company purchased approximately 2.3 million shares for around €1.4 billion[23]