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]

ASML reports €7.7 billion total net sales and €2.3 billion net income in Q2 2025 Agenda July 16, 2025 Page 2 Public • Investor key messages • Business summary • Outlook • Financial statements Full-year 2025 expected total net sales growth of around 15% with gross margin around 52% ASML 2025 Second-Quarter Veldhoven, the Netherlands July 16, 2025 Investor key messages July 16, 2025 Page 3 Investor key messages July 16, 2025 Page 4 Public • The semiconductor industry remains strong, driven by artificial intel ...

Core Viewpoint - ASML Holding N.V. has experienced a significant share price increase of over 17% in the past month, outperforming the S&P 500 index which rose by 12.1% during the same period [1][2]. Market Dynamics - The recent rally in ASML's stock is attributed to broader market optimism stemming from progress in U.S.-China trade negotiations, which have improved market sentiment since late April [2][4]. - A recent trade deal between the U.S. and China has led to a temporary reduction in tariffs, with the U.S. lowering tariffs on Chinese imports from 145% to 30%, and China reducing duties on U.S. imports from 125% to 10% for 90 days [3][4]. Industry Performance - The positive market sentiment has also benefited other semiconductor companies, with Lam Research, KLA Corporation, and Applied Materials seeing share price increases of 32.5%, 24%, and 19.6% respectively over the past month [5]. Technological Leadership - ASML holds a near-monopoly in extreme ultraviolet (EUV) lithography, essential for producing advanced chips at 3nm and below, positioning the company as a key player in semiconductor manufacturing [6][9]. - The introduction of High-NA EUV technology, designed for sub-2nm nodes, represents a significant advancement in chip manufacturing, although its adoption has been slower than anticipated [7][9]. Growth Drivers - The ongoing AI revolution is expected to drive demand for advanced semiconductors, with ASML's EUV and High-NA EUV machines being critical for manufacturing these chips [10][11]. - As cloud providers and tech giants expand their AI infrastructure, the demand for ASML's lithography tools is anticipated to increase, providing long-term growth opportunities [11]. Financial Performance - ASML's first-quarter 2025 financial results showed resilience, with net sales of €7.74 billion, a 46% year-over-year increase, and net income rising 92% to €2.36 billion [12]. - The company's gross margin expanded by 300 basis points year-over-year to 54%, reflecting strong cost management and productivity improvements [13]. - ASML expects a 15% revenue growth for 2025, driven by rising demand for EUV and DUV lithography systems, along with a forecasted 70-basis-point margin expansion [14]. Valuation - ASML's stock trades at a premium with a forward 12-month price-to-earnings (P/E) ratio of 26.2, higher than the sector average of 25.5, justified by its technological dominance and growth prospects [15][17]. - Compared to other semiconductor players, ASML's P/E ratio exceeds those of KLA Corporation, Lam Research, and Applied Materials, which trade at 24.1X, 21.25X, and 17.09X respectively [17]. Investment Recommendation - Given ASML's technological leadership, robust financials, and strong long-term growth potential, the stock is considered a compelling buy [18].

Core Concept - The article discusses the concept of "wide moat" companies, which possess strong competitive advantages that protect them from rivals, ensuring long-term profitability and stability [1][3][4]. Group 1: Characteristics of Wide Moat Companies - Wide moat companies benefit from brand strength, network effects, high customer switching costs, regulatory protections, and economies of scale, making it difficult for competitors to erode their market share [3]. - These companies typically enjoy strong pricing power, stable profit margins, and the ability to reinvest in their businesses, further reinforcing their competitive advantages [3]. Group 2: Investment Rationale - Investing in wide moat businesses is seen as a strategy for building long-term wealth, as they tend to produce steady cash flows and navigate market volatility effectively [5]. - Wide moat companies are more resilient during economic downturns due to their solid market positions and robust balance sheets [4]. Group 3: Examples of Wide Moat Companies - Pfizer Inc. is highlighted for its robust patent portfolio and strong R&D capabilities, which protect its position in the pharmaceutical industry [7][8]. - ASML Holding is noted for its technological leadership in lithography equipment, maintaining a near-monopoly on extreme ultraviolet (EUV) lithography essential for advanced chip production [10][11]. - Lam Research Corporation benefits from its leadership in wafer fabrication equipment, with significant capital requirements creating high barriers to entry [14]. - The Coca-Cola Company exemplifies a wide moat with its brand recognition and extensive distribution network, maintaining a leading position in the non-alcoholic beverage market [17]. Group 4: Market Trends and Future Outlook - ASML is well-positioned to capitalize on the AI revolution, driving demand for advanced semiconductors [13]. - Lam Research is at the center of the AI revolution, with its tools crucial for high-performance computing and memory efficiency [16]. - Coca-Cola's innovation strategy focuses on expanding its portfolio to meet evolving consumer preferences, emphasizing healthier options and energy drinks [19].

For Immediate ReleasesChicago, IL – April 16, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include ASML Holding N.V. (ASML) , NVIDIA Corp. (NVDA) , Intel Corp. (INTC) and Taiwan Semiconductor Manufacturing Company Ltd. (TSM) . Here are highlights from Wednesday’s Analyst Blog:2 Wide Moat Semiconductor Stocks to Buy at ...

A series of President Donald Trump’s ambiguous tariffs on several other countries, including China, wreaked havoc on Wall Street, and semiconductor stocks suffered the consequences. However, the latest tariff exemptions on chips and other high-tech goods boosted the equity market, leading to a recovery in many previously declining semiconductor stocks.  Therefore, this is an ideal time to invest in strong semiconductor stocks, such as ASML Holding N.V. (ASML) and NVIDIA Corporation (NVDA) , which are curren ...

ASML 2024 Investor Day Summary Company Overview - **Company**: ASML - **Event**: 2024 Investor Day - **Date**: November 14, 2024 - **Location**: Veldhoven, Netherlands Key Industry Insights - The semiconductor industry is projected to remain strong, with a market size of €1 trillion in 2022 and expected to maintain this size in 2024, but with a shift towards advanced logic and DRAM due to AI advancements [14][15] - AI is expected to significantly boost the semiconductor industry, with approximately 40% of the semiconductor business projected to revolve around AI by 2030 [32][33] - The industry requires major innovations to improve cost and energy consumption, particularly in logic and DRAM sectors [20][21] Technology and Product Developments - ASML emphasizes the importance of lithography in driving down costs and energy consumption, asserting that it will remain central to innovation in the semiconductor industry [22] - The company is focusing on EUV (Extreme Ultraviolet) technology, which is maturing and will be scalable for many years, providing customers with cost and energy efficiency [23][24] - Holistic lithography is highlighted as a key solution for improving product quality, flexibility, and time to market [17][18] - ASML plans to reduce the cost of EUV exposure by 30% by 2030 while also cutting emissions by 50% [60][62] Market Trends and Customer Focus - The demand for computing power is accelerating, particularly driven by AI, with a projected increase of 16 times every two years, compared to Moore's Law [40][41] - DRAM is identified as a bottleneck for AI, leading to a shift towards high bandwidth memory (HBM) and potential processing in memory architectures [51][52] - ASML's installed base is growing, leading to increased opportunities for service and upgrades, which are becoming a larger part of the business [26] ESG Commitments - ASML is committed to achieving greenhouse gas neutrality for scope 1 and scope 2 emissions by 2025 and is on track to meet this goal [104] Financial Outlook - The semiconductor industry is expected to remain profitable, with an EBIT of €865 billion in 2023, despite being a downturn year [35][36] - More than €500 billion is projected to be spent on R&D in 2024 to foster innovation within the industry [37] Conclusion - ASML is optimistic about the future, with a strong focus on innovation, customer partnerships, and sustainability initiatives, positioning itself to capitalize on the evolving semiconductor landscape driven by AI and advanced technologies [19][27]