Is it worth considering a purchase of the lesser-known chip stock, given its current 52-week peak prices?
ASML's Q2 Results and Future Projections Boost Optimism
In the semiconductor equipment manufacturing industry, ASML Holding is making waves with its impressive second-quarter results and positive outlook for the future.
ASML, headquartered in Veldhoven, Netherlands, reported a 47% increase in EPS to €5.90, and net profit advanced by 45% to €2.3 billion ($2.7 billion). Gross margin climbed to 53.7%, exceeding the guided range. Analyst forecasts for ASML's second-quarter net sales were surpassed, with actual sales coming in at €7.69 billion ($9.05 billion).
Looking ahead to fiscal 2026, projections edge slightly higher, with EPS estimated at $28.37. For fiscal 2025, consensus estimates point to a 35% rise in the bottom line to $28.17. These figures suggest a promising future for the company.
ASML's portfolio includes lithography, metrology, and inspection systems, which are essential for the production of advanced semiconductors. The rising lithography intensity across the industry is fueled by Taiwan Semiconductor's advanced A14 logic nodes and the steady march toward High NA extreme ultraviolet (EUV) technology. By 2030, High NA EUV technology is expected to account for 15% to 20% of ASML's revenue.
The company has begun to extend its reach into artificial intelligence (AI) as well. ASML led Mistral AI's Series C funding round with a €1.3 billion ($1.5 billion) investment.
ASML's market capitalization is approximately $343 billion, making it a significant player in the industry. UBS has referred to ASML as a "quality compounder" due to its long-term growth potential.
On Sept. 15, ASML's shares surged 7% in a single session, and on Sept. 18, ASML's stock marked a new 52-week high at $938.68. The average price target for ASML stands at $880.75, with projections reaching as high as $1,000, offering a potential gain of 8% from current levels.
Analysts generally view ASML Holding positively with most recommending to buy or hold the stock. JPMorgan rates ASML as "Overweight" with a price target of 822 euros, suggesting some room for appreciation, while the consensus target averages around 724.56 euros, near the current trading levels around 730 euros.
In conclusion, ASML's strong second-quarter results and positive outlook for the future have boosted optimism in the company. With its focus on lithography, metrology, and inspection systems, and its foray into AI, ASML is well-positioned to continue its growth in the semiconductor industry.
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