There is a company called ASML. A very critical company like Taiwan Semiconductor, and not many people even know about it. ASML helps Semiconductor companies build AI Chips. It’s a semiconductor equipment company.
ASML is the only company producing Extreme Ultraviolet Lithography EUV machines necessary for printing the most advanced AI chips. It’s a huge $280 billion market cap company based in the Netherlands. As companies build AI data centers around the world, the demand for advanced chips and ASML machines will explode. There is no competition. Hence, the long-term outlook for the company looks extremely strong.
Just when everyone is chasing the AI stocks, why is ASML down big-time?
The market has turned sour on the company because the management guided lower revenues and earnings for 2025 and the stock is already trading at 30 times FY25 earnings. So, traders dumped the stock, and it’s down from $1100 to $718.
It’s Strength has become the Weakness
ASML has a monopoly, and it makes machines vital to AI. The government is so sensitive about AI that it does not want advanced machines made by ASML to land in China. They have placed export bans on the most advanced machines and they recently denied licenses to service some machines already in China. What does it mean – Less Business Opportunity for ASML. A big portion of ASML sales comes from China. No wonder, they guided lower revenues.
Should you buy the stock?
I do not like a stock that trades below 200 dma. But one should keep a close eye on signs of turnaround on the chart
Chart Source: Finviz.com
Please do your own due diligence before trading. Nothing here or in the newsletters constitutes financial advice. These are just my views based on my experience.
showing signs of reversal today