Core Viewpoint - ASML's stock has significantly increased over the past year, driven by its essential role in the AI market and the expected growth in demand for its lithography systems [1] Group 1: ASML's Role in AI Infrastructure - ASML is the largest producer of lithography systems and the only manufacturer of high-end extreme ultraviolet (EUV) lithography systems, crucial for producing advanced chips [2] - Major foundries like TSMC, Samsung, and Intel rely on ASML's EUV systems to manufacture sophisticated chips, making ASML a key player in the AI infrastructure market [3] - The AI infrastructure market is projected to grow at a CAGR of 29.1% from 2025 to 2032, positioning ASML favorably to benefit from this expansion without facing competitive pressures from individual chipmakers [4] Group 2: Memory Market Recovery - ASML supplies lithography systems to memory chipmakers, including Micron, which utilize ASML's EUV and DUV systems for chip production [6] - The memory market has experienced cycles of boom and bust, with the last downturn occurring from 2022 to 2023 due to market stagnation and rising interest rates [7] - A new boom is anticipated in 2024 and 2025 as market conditions stabilize, leading to increased demand for AI-related memory chips and boosting ASML's EUV sales [8] Group 3: Financial Performance and Guidance - In 2024, ASML's net sales rose by 3% to €28.3 billion ($33.8 billion), with a flat gross margin of 51.3% and a 3% decline in EPS due to external factors [9] - By 2025, net sales grew by 16% to €32.7 billion ($39.1 billion), with an expanded gross margin of 52.8% and a 28% increase in EPS, driven by AI and memory market growth [10] - ASML's order backlog reached €38.8 billion ($46.4 billion) by the end of 2025, prompting the company to raise its 2026 revenue guidance to between €34 billion ($40.7 billion) and €39 billion ($46.6 billion), indicating a 12% growth at the midpoint [11] - Revenue is expected to reach between €44 billion ($52.6 billion) and €60 billion ($71.8 billion) by 2030, suggesting a 10% five-year CAGR from 2025 [12] Group 4: Valuation Justification - Analysts project ASML's EPS to grow at a 22% CAGR from 2025 to 2027, justifying its premium valuation despite a current price-to-earnings ratio of 42 times this year's earnings [13]

Core Viewpoint - ASML's recent earnings report initially boosted its stock, making it Europe's most valuable company, but concerns about its ability to fulfill record orders led to a decline in share price, indicating high investor expectations [1][2]. Group 1: Financial Performance - ASML's shares increased by 34% in January and are currently trading at 42 times the 2026 earnings estimates, significantly higher than Nvidia's 25 times [2]. - The company's order backlog is at 38.8 billion euros, but the production of its advanced chip-making machines can take up to a year [4]. Group 2: Market Position and Growth Potential - ASML is the sole manufacturer of EUV lithography systems, crucial for producing advanced chip circuitry, which positions it favorably in the market [4]. - Major customers like TSMC are planning significant capacity expansions in 2026, with additional growth expected in 2027 and 2028, which could drive demand for ASML's products [4]. Group 3: Investor Sentiment and Valuation - Analysts are debating ASML's growth potential given its current high valuation of 467 billion euros (approximately $559 billion) [3]. - Some investors express concerns that much of the positive outlook is already reflected in the stock price, leading to discussions about the risk-reward balance of its high multiples [3][7].

ASML reports €32.7 billion total net sales and €9.6 billion net income in 2025 ASML expects 2026 total net sales to be between €34 billion and €39 billion, with a gross margin between 51% and 53% ASML 2025 fourth-quarter and full-year results Veldhoven, the Netherlands January 28, 2026 Agenda January 28, 2026 Page 2 Public • Investor key messages • Business summary • Outlook • Financial statements Investor key messages January 28, 2026 Page 3 Investor key messages1 January 28, 2026 Page 4 1 Investor key mes ...

Core Insights - Applied Materials (AMAT) and ASML Holding (ASML) are pivotal players in the semiconductor equipment market, with AMAT focusing on materials engineering and ASML on lithography-based chip patterning [1][21] Company Performance Applied Materials (AMAT) - AMAT is a significant manufacturer of semiconductor fabrication equipment, with expectations for its leading-edge foundry, logic, DRAM, and high-bandwidth memory (HBM) to be the fastest-growing wafer fabrication equipment businesses by 2026 [3][22] - AMAT's HBM business revenues reached $1.5 billion in fiscal 2025, with a target of $3 billion in the coming years [5] - Flash memory (NAND) sales nearly doubled to $1.41 billion in fiscal 2025 from $747.4 million the previous year, indicating growth despite U.S. export controls on the Chinese market [6] - Recent product launches, including Xtera epi and Kinex hybrid bonding, are expected to contribute to AMAT's growth through 2026 and beyond, with revenue growth estimates of 2.3% and 11.5% for fiscal 2026 and 2027, respectively [7] ASML Holding (ASML) - ASML is transitioning from deep ultraviolet (DUV) to extreme ultraviolet (EUV) lithography, with High-NA systems expected to drive long-term growth [9][10] - The company holds a near-monopoly in EUV technology, crucial for advanced chips at 3nm and below, which positions it favorably for future demand [11][12] - ASML's revenues are projected to grow modestly by 4% in 2026, with earnings growth estimates of 5% [13] Investment Comparison - AMAT shares have increased by 69.5% over the past year, while ASML shares have risen by 78.1% [14] - In terms of valuation, AMAT trades at a forward P/E ratio of 32.76, while ASML trades at a higher forward P/E of 43.57 [18] - Despite both companies having a Zacks Rank 2 (Buy), the decline in ASML's revenues from China and DUV markets makes AMAT a more attractive investment option [22]

Summary of Semiconductor Production Equipment Industry Insights Industry Overview - The semiconductor production equipment industry in Japan is currently viewed as attractive, with a confirmed entry into a recovery phase for front-end equipment [8][10][21]. Key Companies and Upgrades - **Tokyo Electron (TEL)** and **Kokusai Electric** have been upgraded to an Overweight (OW) rating due to increasing inquiries for equipment from foundries and DRAM makers [8][10]. - Other companies highlighted include **Advantest**, **Disco**, **Ebara**, **SCREEN Holdings**, and **Ulvac**, which are also positioned favorably in the market [10][21]. Market Trends - There has been a significant increase in equipment inquiries from foundries and DRAM manufacturers since mid-November 2025, driven by additional investments in AI semiconductors and supply shortages in DRAM [8][10]. - Demand for back-end equipment remains strong, while front-end equipment, which had been weak, is showing signs of recovery [10][21]. Specific Developments - **Micron Technology** plans to invest approximately ¥1,500 billion to construct a new fab in Hiroshima for next-gen HBM chips, which is expected to benefit front-end equipment makers like Tokyo Electron, Ebara, SCREEN HD, and Kokusai Electric [22]. - The transition to 12-inch SiC wafers is anticipated to drive revenue growth for Disco's KABRA systems and Ulvac's deposition equipment, particularly as demand from Chinese EV makers recovers [12][21]. Technological Innovations - Advancements in 3D-DRAM technology, as confirmed by Kioxia Holdings, could lead to significant changes in the DRAM semiconductor production equipment market, benefiting companies like Tokyo Electron, Ebara, and Kokusai Electric [14]. - The collaboration between Advantest and Tokyo Seimitsu on die-level probers aims to improve yield rates in IC packages, indicating a shift towards more complex testing methods [30]. Government Support and External Factors - The Japanese government is providing substantial support to Rapidus, aiming to mass-produce advanced semiconductors, with investments expected to reach ¥1 trillion by the end of F3/27-28 [26]. - Potential US government approval for H200 exports to China could increase demand for Japanese semiconductor production equipment, particularly benefiting back-end equipment makers like Advantest and Disco [24]. Conclusion - The semiconductor production equipment industry in Japan is poised for growth, driven by increased demand for advanced technologies and government support. Key players are strategically positioned to capitalize on these trends, with significant investments and technological advancements expected to shape the market landscape in the coming years [8][10][21][22].

Core Insights - ASML Holding has experienced a significant stock price increase of 55.9% year to date, closing at $1,080.85, which is only 5.3% below its 52-week high of $1,141.72 [1][8] - The company's stock performance has outpaced the Zacks Computer and Technology sector, which has gained 25.5% year to date [2] - ASML's strong fundamentals and near-monopoly in semiconductor manufacturing equipment make it a compelling investment opportunity [3] Financial Performance - ASML reported third-quarter 2025 revenues of €7.52 billion, with a year-over-year earnings growth of 3.8% to €5.48 per share, translating to $6.41 per share in U.S. dollars [12] - The gross margin improved to 51.6%, up 80 basis points, despite a 6.3% decline in system sales due to a shift in product mix [13] - For the fourth quarter, ASML expects revenues between €9.2 billion and €9.8 billion, with gross margins projected at 51-53% [14] Growth Drivers - ASML's leadership in extreme ultraviolet (EUV) lithography technology is a key growth driver, essential for producing advanced chips at 3nm and below [4] - The introduction of High Numerical Aperture (High-NA) EUV systems, designed for sub-2nm production, represents a significant technological advancement for the company [5][9] - The rising demand for artificial intelligence (AI) is expected to further boost ASML's growth, as AI workloads require advanced chips that depend on ASML's lithography technology [10][11] Market Position and Valuation - ASML's stock trades at a forward 12-month price-to-earnings (P/E) ratio of 35.95, higher than the sector average of 28.16, reflecting its strong market position and growth potential [15] - Compared to other semiconductor companies, ASML has a higher P/E multiple than NVIDIA and Marvell Technology but lower than Broadcom [19] Investment Recommendation - Given ASML's dominance in EUV technology, emerging High-NA lithography, and increasing demand for AI-related chips, the fundamentals support a recommendation to buy the stock for long-term investors [20]

Core Viewpoint - A stock split could be beneficial for ASML, given its high share price and strong market position in the AI and semiconductor sectors [1][2]. Group 1: Stock Price and Market Capitalization - ASML's shares have increased by over 50% in 2025, trading close to $1,040, with a market capitalization exceeding $403 billion [1]. - The company's share price is above $1,000, similar to historical levels seen in companies like Nvidia and Amazon before they executed stock splits [4]. Group 2: Potential Benefits of a Stock Split - A stock split could make ASML's shares more accessible to a broader range of investors, potentially increasing its shareholder base [3][4]. - Historical stock splits indicate management's willingness to adjust share counts when necessary, with the last split occurring in October 2007 [5]. Group 3: Financial Performance - In Q3, ASML reported revenues of €7.5 billion and net income of €2.1 billion, with net system orders totaling €5.4 billion, including €3.6 billion for EUV lithography systems [7]. - The company anticipates fiscal 2025 sales of approximately €32.5 billion and a gross margin of 52%, with long-term revenue projections for fiscal 2030 ranging from €44 billion to €60 billion [7]. Group 4: Market Trends and Future Projections - Analysts project a 41% year-over-year growth in EUV lithography sales to €11.1 billion, with total revenue expected to rise 14% year-over-year to €32.3 billion [10]. - Demand for DRAM is outpacing supply, leading manufacturers to plan capacity expansions, which could increase demand for ASML's lithography systems [11]. Group 5: Investment Considerations - ASML trades at 34.6 times forward earnings, which may seem high, but its market dominance and AI-driven growth prospects justify consideration for investment [12].

Core Viewpoint - ASML Holding has demonstrated significant stock performance in 2025, with a year-to-date increase of 44.9%, outperforming the broader technology sector and several semiconductor peers [2][19]. Stock Performance - ASML shares have been volatile in 2025 but have outpaced the Zacks Computer and Technology sector's 23% gain [2]. - Compared to semiconductor peers, MKS Inc., Cirrus Logic, and FormFactor, which have seen YTD increases of 34.5%, 16.1%, and 11% respectively, ASML's performance stands out [2]. Competitive Advantage - ASML holds a near-monopoly in extreme ultraviolet (EUV) lithography, essential for manufacturing advanced chips at 3nm and below, providing it with extraordinary pricing power and strategic importance [5]. - The company is advancing its High Numerical Aperture (High-NA) EUV systems, which are crucial for sub-2nm production, indicating a significant long-term growth potential [6][8]. Financial Performance - In Q3 2025, ASML reported earnings of €5.48 per share, a 3.8% year-over-year increase, and revenues of €7.52 billion, up 0.7% [11]. - The gross margin improved to 51.6%, attributed to higher volumes of low-NA EUV tools and upgrades, despite a 6.3% decline in system sales [12]. - For Q4 2025, ASML expects revenues between €9.2 billion and €9.8 billion, with gross margins projected at 51-53% [13]. Valuation - ASML's forward 12-month price-to-earnings (P/E) ratio is 33.45X, higher than the sector average of 28.15X, reflecting its market position and technology leadership [14][18]. - The premium valuation is justified by ASML's monopoly in EUV lithography and consistent margin performance [14]. Growth Drivers - The demand for artificial intelligence (AI) is a significant growth driver for ASML, as AI workloads require advanced chips that depend on the precision lithography provided by ASML's EUV machines [9][10]. - The complexity and cost of EUV technology provide ASML with deep competitive protection, ensuring its continued dominance in the semiconductor sector [10]. Conclusion - ASML's leadership in EUV technology, progress in High-NA systems, and increasing demand for AI-related chips position the company for sustained financial performance, making it a strong candidate for long-term investment [19].

Group 1 - TSMC and ASML are critical players in the semiconductor market, with TSMC being the largest contract chipmaker and ASML the leading producer of lithography systems, including the only extreme ultraviolet (EUV) systems [1][8] - TSMC has outpaced competitors like Intel and Samsung in adopting ASML's EUV systems, leading to significant stock growth, with TSMC's stock nearly tripling and ASML's stock more than doubling over the past five years [2][4] - TSMC's revenue grew at a CAGR of 24% from 2020 to 2024, driven by demand for 5nm and 3nm chips, and the expansion of the high-performance computing (HPC) market [4][6] Group 2 - In Q3 2025, TSMC generated 60% of its revenue from 3nm and 5nm nodes, with 57% from the HPC market and 30% from smartphones, leading to an upward revision of its full-year revenue growth guidance to mid-30% [6][7] - Analysts project TSMC's revenue and EPS to grow at a CAGR of 24% and 27% from 2024 to 2027, supported by the AI market expansion and new technology developments [7] - TSMC's advanced packaging technologies and AI-driven process improvements have enhanced its gross margins, while the establishment of overseas fabs aims to mitigate geopolitical risks [5][6]

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]