Economic Indicators - US MBA mortgage applications fell by 8.5% in the week ended January 23, with the purchase mortgage sub-index down 0.4% and the refinancing mortgage sub-index down 15.7% [1] - The average 30-year fixed rate mortgage rose by 8 basis points to 6.24% from 6.16% in the prior week [1] - The FOMC voted 10-2 to keep the fed funds target range unchanged at 3.50%-3.75%, indicating solid economic activity and somewhat elevated inflation [6][7] Stock Market Performance - Stock indexes settled mixed, with the S&P 500 down 0.01% and the Nasdaq 100 up 0.32% [5] - Strength in chipmakers and AI infrastructure stocks was noted, driven by a record Q4 booking of 13.2 billion euros reported by ASML Holding NV, significantly above the consensus of 6.85 billion euros [4] - 81% of the 106 S&P 500 companies that reported earnings beat expectations, with S&P earnings growth expected to climb by 8.6% in Q4 [10][11] Company Earnings and Forecasts - Seagate Technology Holdings Plc closed up more than 19% after positive earnings results, while Texas Instruments and ASML also contributed to bullish market sentiment [15] - F5 Inc. reported Q4 net revenue of $822.5 million, exceeding the consensus of $758.8 million, and raised its full-year revenue forecast [16] - AT&T reported Q4 revenue of $33.5 billion, stronger than the consensus of $32.83 billion [17] Market Trends and Expectations - The market is focused on new tariff news and the prospects for a continued resolution to fund the government, with initial weekly unemployment claims expected to increase by 5,000 to 205,000 [9] - The dollar index finished higher, recovering from a nearly 4-year low, while gold prices surged more than 3% to a new all-time high [2] - European government bond yields were mixed, with the 10-year German bund yield falling by 1.7 basis points to 2.857% [13]

US MBA mortgage applications fell -8.5% in the week ended January 23, with the purchase mortgage sub-index down -0.4% and the refinancing mortgage sub-index down 15.7%. The average 30-year fixed rate mortgage rose +8 bp to 6.24% from 6.16% in the prior week.WTI crude oil (CLH26) climbed to a 4-month high today after President Trump said in a social media post that he wants Iran to come to the table and negotiate a “fair and equitable deal with No Nuclear Weapons.” He warned Iran that time is running out to ...

Threats to stocks and the dollar remain. President Trump has threatened new 100% tariffs on US imports from Canada, the possibility of a US government shutdown over ICE funding, and lingering concerns about Greenland. In addition, there is political uncertainty about the Fed, as the FOMC is expected to leave rates unchanged at today’s meeting, potentially drawing new threats from Mr. Trump for refusing to cut rates further.US MBA mortgage applications fell -8.5% in the week ended January 23, with the purcha ...

Core Viewpoint - ASML's stock has received a significant upgrade, indicating positive future prospects for the company as demand for advanced chipmaking equipment surges due to the growth in AI chip production [1][3]. Group 1: Stock Performance and Market Sentiment - ASML's shares increased by 73% over the past year, reflecting strong investor interest and confidence in the company's future [1]. - Aletheia Capital upgraded ASML's rating from sell to buy and doubled its price target from $750 to $1,500, which led to a nearly 9% increase in stock price on the first trading day of 2026 [3][4]. Group 2: Demand for Advanced Chips - The demand for advanced chips, particularly those produced using 5nm, 3nm, and 2nm process nodes, is extremely high, with TSMC's 2nm node fully booked for 2026 [6]. - TSMC is expected to increase its capital expenditure to nearly $50 billion in 2026, up from $40 billion to $42 billion in 2025, with a significant portion allocated to advanced chip processing technologies [7]. Group 3: ASML's Market Position - ASML dominates the lithography machine market, controlling over 90% of the DUV lithography market and holding a near-monopoly in EUV lithography, essential for producing advanced chips used in AI applications [5]. - The company received orders worth approximately €4 billion in Q1, €5.55 billion in Q2, and €5.4 billion in Q3, indicating strong order inflow that is expected to continue into 2026 [8]. Group 4: Financial Outlook - ASML's earnings are projected to increase by 28% in 2025, with a 15% rise in revenue, although growth may slow due to tariffs [10]. - For 2026, revenue and earnings are forecasted to grow by 6%, but the company may exceed these expectations due to favorable industry conditions where demand outstrips supply [11]. - ASML's current trading multiple of 34 times forward earnings is considered reasonable compared to the Nasdaq-100 index's multiple of 32 [11].

Group 1: OpenAI and Chip Deals - OpenAI has announced a deal to purchase 10 gigawatts of computer chips from Broadcom, continuing its trend of significant acquisitions in the AI sector [1] - This follows similar agreements with AMD and Nvidia, raising concerns about OpenAI's extensive connections with major US companies and the potential for an AI-driven market bubble [2][5] Group 2: Impact on European Companies - Analysts suggest that OpenAI's success could positively impact European companies like ASML, as demand and revenues flow through the supply chain from data center companies to chip manufacturers [3][4] - ASML's lithography machines are crucial for producing advanced chips, and there is optimism about ASML's earnings recovering by 2027, indicating strong market demand [15][16] Group 3: Market Valuations and Risks - The IMF's global financial stability report warns that equity and corporate credit valuations are stretched, driven by enthusiasm for AI mega-cap stocks, which could lead to a sudden market correction [5][8] - Current stock valuations are estimated to be about 10% overvalued on average, which is less than the 20% overvaluation seen during the tech bubble of 1999 [8] Group 4: Supply Chain Concerns - There are concerns about the interconnectedness of the supply chain, where issues in major tech firms could have significant knock-on effects throughout the semiconductor industry, impacting companies like Nvidia and TSMC [14][17] - If demand from hyperscalers decreases, it could lead to reduced orders for chips, affecting TSMC's capacity and subsequently ASML's machinery sales [17]

Group 1 - ASML has averaged annual gains of 27.7% over the past 10 years, turning a $5,000 investment into over $57,000, and is expected to continue this upward trend [1] - The company holds a near-monopoly on specialized lithography machines essential for producing high-performance chips, particularly in the booming data center market [1][2] - ASML is the only supplier of advanced extreme ultraviolet systems (EUVs), which are critical for semiconductor manufacturing [2] Group 2 - Approximately 95% of ASML lithography systems sold in the past 30 years are still active, leading to long-term service contracts and stable revenue [3] - The company's recent forward-looking price-to-earnings (P/E) ratio is 33, slightly below its five-year average of 34, indicating it is relatively fairly valued [4] - ASML's price-to-sales ratio is high at 11, and its beta of 1.28 suggests it is 28% more volatile than the overall market, making it more suitable for long-term investors [4] Group 3 - Investors bullish on semiconductors are encouraged to consider ASML for its strong market position and growth potential [5] - Despite ASML's strengths, it was not included in a list of the 10 best stocks identified by The Motley Fool Stock Advisor, which may suggest alternative investment opportunities [6][7]

Group 1 - ASML Holding N.V. is recognized as a high-growth semiconductor stock with profitability expected in 2025, and UBS has raised its price target to EUR940.00 from EUR750.00 while maintaining a 'Buy' rating [1][2] - UBS has increased its earnings per share estimates for ASML by 15-10% for the years 2026 and 2027, reflecting confidence in the company's ability to benefit from AI-led memory growth [2] - The positive outlook for ASML is supported by better-than-expected sales in smartphones and PCs, which are driving demand for its products, along with anticipated favorable news flow over the next 12 months [3] Group 2 - ASML is a Dutch multinational company specializing in the design, manufacture, and sale of advanced lithography machines, crucial for semiconductor chip production, particularly in extreme ultraviolet (EUV) lithography technology [4]

Core Viewpoint - ASML Holding N.V. is a significant entity in the semiconductor industry, with Citigroup maintaining a "Buy" rating and raising its price target, reflecting confidence in the company's future performance [1][5]. Group 1: Stock Performance - ASML's stock recently closed at $1,043.09, showing a 1.05% increase from the previous session, outperforming the S&P 500's gain of 0.37% and the Dow's decline of 0.14% [2]. - Over the past period, ASML's shares have surged by 32.05%, significantly outperforming the Computer and Technology sector's gain of 8.04% and the S&P 500's rise of 4.26% [2][5]. - Currently, ASML is trading at $1,015.30, experiencing a decrease of 2.68%, with a trading volume of 838,637 shares [4]. Group 2: Earnings Expectations - Investors are anticipating ASML's upcoming earnings report on October 15, 2025, with projected earnings per share (EPS) expected to be $6.36, marking a 9.66% increase from the same quarter last year [3]. - The Zacks Consensus Estimate forecasts ASML's revenue to reach $8.81 billion, a 7.34% increase compared to the previous year [3]. Group 3: Analyst Ratings - Citigroup has raised its price target for ASML from EUR 825 to EUR 1,050, indicating strong confidence in the company's growth potential [1][5].