ASML: No Real Reasons For Bulls To Panic

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ASML: No Real Reasons For Bulls To Panic

seekingalpha08-26

ASML investors endured a brutal bear market recently. Is the rally really over?ASML is the undisputed EUV leader, benefiting from the surge in AI infrastructure investments.The Dutch company could see...

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martinho
·08-26
Fake news. It will continue to fall
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Is the rally really over?ASML is the undisputed EUV leader, benefiting from the surge in AI infrastructure investments.The Dutch company could see...</p>\n\n<a href=\"https://seekingalpha.com/article/4717080-asml-no-real-reasons-for-bulls-to-panic\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU0823421416.USD","symbol_name":"BNP PARIBAS DISRUPTIVE TECHNOLOGY \"C\" (USD) INC","start_time":0,"source_url":"https://seekingalpha.com/article/4717080-asml-no-real-reasons-for-bulls-to-panic","article_id":"2462913768","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2151265313/image_2151265313.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2462913768","pubTimestamp":1724679419,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"ASML investors endured a brutal bear market recently. 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Is the rally really over?ASML is the undisputed EUV leader, benefiting from the surge in AI infrastructure investments.The Dutch company could see topline growth returning in 2025 as it laps a transition year.Geopolitical risks due to its China exposure could hinder a more robust valuation re-rating.I explain why the recent bear market has provided another solid opportunity for long-term investors to buy more. Here's why.Pixelbizz/iStock Editorial via Getty Images ASML: Brutal Bear Market, But Don't Fear ASML Holding (NASDAQ:ASML) investors have endured a brutal summer, as ASML stock topped out in early July 2024 before collapsing over 30% through its August lows. However, robust dip-buying sentiment has been assessed above the $750 level as investors bet on a turnaround in the stock. In my bullish ASML article in June 2024, I updated that its breakout rally seemed imminent. While the breakout arrived, it quickly fizzled out as semiconductor investors considered the sustainability of the AI upcycle. In addition, the unwinding of the yen carry trade in early August intensified the pain of ASML's outward rotation. Notwithstanding its recent recovery, the stock remains almost 20% below its July highs, suggesting a significant level of caution is still observed. With the S&P 500 (SP500) closing in against its all-time highs, is the rally for ASML over as investors reassess Nvidia's (NVDA) upcoming earnings release this week? There's no doubt that Nvidia's earnings will be closely scrutinized to ascertain whether AI infrastructure stocks can continue their spectacular run. ASML Rides The AI Infrastructure Tailwinds As the provider of EUV lithography machines, ASML has a stranglehold over the supply of AI chipmaking equipment for leading-edge foundries like TSMC (TSM). Samsung (OTCPK:SSNLF) and Intel (INTC) have also attempted to catch up with the Taiwanese foundry leader, which should spur an EUV arms race as we transition into the High NA era. As a reminder, ASML emphasized that \"High NA will enable an almost three-time increase in transistor density relative to the Low NA system.\" In addition, the ASP for its High NA systems cost \"north of EUR350M\" each. Consequently, I assess the significant potential for the EUV leader to benefit from the AI arms race as hyperscalers and big tech invest more aggressively to maintain their leadership edge. Based on recent big tech earnings, it has become increasingly clear that big tech views AI as a fundamental underpinning to its growth strategy. It also views it through a long-term lens, expressing confidence in the potentially lasting impact of investing ahead of the curve or risking falling behind its peers. Therefore, I believe ASML is well-positioned to capitalize on the underlying AI growth drivers, benefiting its key foundry customers. Given the announced reduction in CapEx investments, Intel's foundry roadmap could be affected. Therefore, some investors could be concerned whether Intel's delay/reductions could affect the ramp-up of its foundry investments, potentially slowing the revenue conversion for ASML. Accordingly, ASML expects 2024 to be a \"transition\" year, as it expects to achieve a midpoint revenue of between EUR30B and EUR40B in 2025. In addition, the company has continued to record strong bookings, resulting in a total backlog of EUR39B in Q2. As a result, I believe it provides substantial clarity into the company's 2025 revenue conversion prospects, potentially lowering the execution risks. In addition, the ramp-up in AI memory demand through HBM memory solutions is also expected to provide further tailwinds for ASML. As Samsung and Micron (MU) compete against SK Hynix in the HBM space, it should spur another race to become Nvidia's preferred HBM supplier. Therefore, I assess that ASML's ability to capitalize on the AI logic and memory growth drivers should mitigate the transition risks as its customers move toward High NA models subsequently. ASML Anticipates 2025 To Be Solid ASML estimates (TIKR) As seen above, ASML's revenue growth is expected to see an inflection from 2025, aligned with management's confident commentary and outlook. The robust downstream demand from the hyperscalers and big tech has afforded more clarity to ASML's projections. While a normalization could occur from 2026, a potentially more aggressive AI investment cadence could help mitigate some of the assessed growth normalization impact. Furthermore, AI factories could be the next growth vector not encapsulated in the current forecasts as enterprise customers and smaller data centers broaden their AI adoption. However, ASML is still susceptible to US export restrictions on chips, which could hobble its sales to Chinese customers. Despite that, the recent announcement that ASML could be exempt from more harsh restrictions has helped ease investor concerns. Notably, China sales have lifted ASML's prospects, accounting for 49% of net system sales in Q2. China is assessed to be stockpiling chip equipment in anticipation of more draconian rules as a new administration takes over from the outgoing Biden administration in early 2025. Therefore, I assess that unless the market anticipates a significant deterioration in China-related sales due to more draconian restrictions, China is still expected to be a tailwind for ASML. Is ASML Stock A Buy, Sell, Or Hold? ASML price chart (weekly, medium-term, adjusted for dividends) (TradingView) ASML fell into a bear market over the past month but saw robust buying support above the $750 level as buyers returned aggressively. ASML's \"B\" momentum grade corroborates my conviction, although the selling intensity took some shine off its previous rally. However, ASML's forward-adjusted PEG ratio of 1.9 is aligned with its sector median of 1.92. It's also broadly consistent with its 5Y average of 1.83, suggesting the stock doesn't seem to be overvalued, considering its fundamentally strong thesis. The stock's \"A+\" profitability grade underpins my bullish proposition. I suggest investors consider joining the dip-buyers in early August and betting on a further rally in the stock. Risks To ASML's Bullish Thesis ASML is still priced for growth, as seen with its \"A-\" growth grade. Therefore, a marked slowdown in AI infrastructure investments could have an outsized impact on its forward bookings, resulting in a worse-than-anticipated deceleration in revenue growth. China remains a significant geopolitical headwind, potentially facing more uncertainties as a new administration assumes power in early 2025. While ASML's leading-edge equipment sales should help mitigate a slowdown in the Chinese market, it could also lead to a valuation de-rating in ASML. Rating: Maintain Buy. Important note: Investors are reminded to do their due diligence and not rely on the information provided as financial advice. Consider this article as supplementing your required research. Please always apply independent thinking. Note that the rating is not intended to time a specific entry/exit at the point of writing unless otherwise specified. I Want To Hear From You Have constructive commentary to improve our thesis? Spotted a critical gap in our view? Saw something important that we didn't? Agree or disagree? Comment below with the aim of helping everyone in the community to learn better!  Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"Business Data","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[{"id":342732184690904,"gmtCreate":1724681475512,"gmtModify":1724681479153,"author":{"id":"3581643766897530","authorId":"3581643766897530","name":"martinho","avatar":"https://static.tigerbbs.com/f376700fba4e7f0e72ae4acf845d5452","vip":1,"crmLevel":4,"crmLevelSwitch":0,"idStr":"3581643766897530","authorIdStr":"3581643766897530"},"htmlText":"Fake news. It will continue to fall","listText":"Fake news. It will continue to fall","text":"Fake news. It will continue to fall","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/342732184690904","repostId":2462913768,"repostType":2,"repost":{"id":"2462913768","pubTimestamp":1724679419,"share":"https://ttm.financial/m/news/2462913768?lang=&edition=fundamental","pubTime":"2024-08-26 21:36","market":"hk","language":"en","title":"ASML: No Real Reasons For Bulls To Panic","url":"https://stock-news.laohu8.com/highlight/detail?id=2462913768","media":"seekingalpha","summary":"ASML investors endured a brutal bear market recently. Is the rally really over?","content":"<html><body><ul><li>ASML investors endured a brutal bear market recently. Is the rally really over?</li><li>ASML is the undisputed EUV leader, benefiting from the surge in AI infrastructure investments.</li><li>The Dutch company could see topline growth returning in 2025 as it laps a transition year.</li><li>Geopolitical risks due to its China exposure could hinder a more robust valuation re-rating.</li><li>I explain why the recent bear market has provided another solid opportunity for long-term investors to buy more. Here's why.</li></ul><p><figure><picture><img fetchpriority=\"high\" height=\"1024px\" sizes=\"(max-width: 768px) calc(100vw - 36px), (max-width: 1024px) calc(100vw - 132px), (max-width: 1200px) calc(66.6vw - 72px), 600px\" src=\"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2151265313/image_2151265313.jpg?io=getty-c-w750\" srcset=\"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2151265313/image_2151265313.jpg?io=getty-c-w1536 1536w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2151265313/image_2151265313.jpg?io=getty-c-w1280 1280w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2151265313/image_2151265313.jpg?io=getty-c-w1080 1080w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2151265313/image_2151265313.jpg?io=getty-c-w750 750w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2151265313/image_2151265313.jpg?io=getty-c-w640 640w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2151265313/image_2151265313.jpg?io=getty-c-w480 480w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2151265313/image_2151265313.jpg?io=getty-c-w320 320w, https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2151265313/image_2151265313.jpg?io=getty-c-w240 240w\" width=\"1536px\"/></picture><figcaption><p>Pixelbizz/iStock Editorial via Getty Images</p></figcaption></figure></p> <h2>ASML: Brutal Bear Market, But Don't Fear</h2> <p>ASML Holding (<span>NASDAQ:ASML</span>) investors have endured a brutal summer, as ASML stock topped out in early July 2024 before collapsing over 30% through its August lows. However, robust dip-buying sentiment has<span> been assessed above the $750 level as investors bet on a turnaround in the stock.</span></p> <p>In my bullish ASML article in June 2024, I updated that its breakout rally seemed imminent. While the breakout arrived, it quickly fizzled out as semiconductor investors considered the sustainability of the AI upcycle. In addition, the unwinding of the yen carry trade in early August intensified the pain of ASML's outward rotation. Notwithstanding its recent recovery, the stock remains almost 20% below its July highs, suggesting a significant level of caution is still observed.</p> <p>With the S&amp;P 500 (SP500) closing<span> in against its all-time highs, is the rally for ASML over as investors reassess Nvidia's (</span>NVDA<span>) upcoming earnings release this week? There's no doubt that </span>Nvidia's earnings will be closely scrutinized<span> to ascertain whether AI infrastructure stocks can continue their spectacular run.</span></p> <h2>ASML Rides The AI Infrastructure Tailwinds</h2> <p>As the provider of EUV lithography machines, ASML has a stranglehold over the supply of AI chipmaking equipment for leading-edge foundries like TSMC (TSM). Samsung (OTCPK:SSNLF) and Intel (INTC) have also attempted to catch up with the Taiwanese foundry leader, which should spur an EUV arms race as we transition into the High NA era. As a reminder, ASML emphasized that \"High NA will enable an almost three-time increase in transistor density relative to the Low NA system.\" In addition, the ASP for its High NA systems cost \"north of EUR350M\" each. Consequently, I assess the significant potential for the EUV leader to benefit from the AI arms race as hyperscalers and big tech invest more aggressively to maintain their leadership edge.</p> <p>Based on recent big tech earnings, it has become increasingly clear that big tech views AI as a fundamental underpinning to its growth strategy. It also views it through a long-term lens, expressing confidence in the potentially lasting impact of investing ahead of the curve or risking falling behind its peers.</p> <p>Therefore, I believe ASML is well-positioned to capitalize on the underlying AI growth drivers, benefiting its key foundry customers. Given the announced reduction in CapEx investments, Intel's foundry roadmap could be affected. Therefore, some investors could be concerned whether Intel's delay/reductions could affect the ramp-up of its foundry investments, potentially slowing the revenue conversion for ASML.</p> <p>Accordingly, ASML expects 2024 to be a \"transition\" year, as it expects to achieve a midpoint revenue of between EUR30B and EUR40B in 2025. In addition, the company has continued to record strong bookings, resulting in a total backlog of EUR39B in Q2. As a result, I believe it provides substantial clarity into the company's 2025 revenue conversion prospects, potentially lowering the execution risks.</p> <p>In addition, the ramp-up in AI memory demand through HBM memory solutions is also expected to provide further tailwinds for ASML. As Samsung and Micron (MU) compete against SK Hynix in the HBM space, it should spur another race to become Nvidia's preferred HBM supplier. Therefore, I assess that ASML's ability to capitalize on the AI logic and memory growth drivers should mitigate the transition risks as its customers move toward High NA models subsequently.</p> <h2>ASML Anticipates 2025 To Be Solid</h2> <p><figure contenteditable=\"false\"><picture><span><img contenteditable=\"false\" loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2024/8/26/51630113-17246502776908267.jpg\"/></span></picture><figcaption><p>ASML estimates (TIKR)</p></figcaption></figure></p> <p>As seen above, ASML's revenue growth is expected to see an inflection from 2025, aligned with management's confident commentary and outlook. The robust downstream demand from the hyperscalers and big tech has afforded more clarity to ASML's projections. While a normalization could occur from 2026, a potentially more aggressive AI investment cadence could help mitigate some of the assessed growth normalization impact. Furthermore, AI factories could be the next growth vector not encapsulated in the current forecasts as enterprise customers and smaller data centers broaden their AI adoption.</p> <p>However, ASML is still susceptible to US export restrictions on chips, which could hobble its sales to Chinese customers. Despite that, the recent announcement that ASML could be exempt from more harsh restrictions has helped ease investor concerns. Notably, China sales have lifted ASML's prospects, accounting for 49% of net system sales in Q2.</p> <p>China is assessed to be stockpiling chip equipment in anticipation of more draconian rules as a new administration takes over from the outgoing Biden administration in early 2025. Therefore, I assess that unless the market anticipates a significant deterioration in China-related sales due to more draconian restrictions, China is still expected to be a tailwind for ASML.</p> <h2>Is ASML Stock A Buy, Sell, Or Hold?</h2> <p><figure contenteditable=\"false\"><picture><span><img contenteditable=\"false\" loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2024/8/26/51630113-17246511079904816.png\"/></span></picture><figcaption><p>ASML price chart (weekly, medium-term, adjusted for dividends) (TradingView)</p></figcaption></figure></p> <p>ASML fell into a bear market over the past month but saw robust buying support above the $750 level as buyers returned aggressively. ASML's \"B\" momentum grade corroborates my conviction, although the selling intensity took some shine off its previous rally.</p> <p>However, ASML's forward-adjusted PEG ratio of 1.9 is aligned with its sector median of 1.92. It's also broadly consistent with its 5Y average of 1.83, suggesting the stock doesn't seem to be overvalued, considering its fundamentally strong thesis.</p> <p>The stock's \"A+\" profitability grade underpins my bullish proposition. I suggest investors consider joining the dip-buyers in early August and betting on a further rally in the stock.</p> <h2>Risks To ASML's Bullish Thesis</h2> <p>ASML is still priced for growth, as seen with its \"A-\" growth grade. Therefore, a marked slowdown in AI infrastructure investments could have an outsized impact on its forward bookings, resulting in a worse-than-anticipated deceleration in revenue growth.</p> <p>China remains a significant geopolitical headwind, potentially facing more uncertainties as a new administration assumes power in early 2025. While ASML's leading-edge equipment sales should help mitigate a slowdown in the Chinese market, it could also lead to a valuation de-rating in ASML.</p> <p><em>Rating: Maintain Buy.</em></p> <p><em>Important note: Investors are reminded to do their due diligence and not rely on the information provided as financial advice. Consider this article as supplementing your required research. Please always apply independent thinking. Note that the rating is not intended to time a specific entry/exit at the point of writing unless otherwise specified.</em></p> <p><strong>I Want To Hear From You</strong></p> <p>Have constructive commentary to improve our thesis? Spotted a critical gap in our view? Saw something important that we didn't? Agree or disagree? Comment below with the aim of helping everyone in the community to learn better!</p> <div></div> <p>Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.</p></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>ASML: No Real Reasons For Bulls To Panic</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nASML: No Real Reasons For Bulls To Panic\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-08-26 21:36 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4717080-asml-no-real-reasons-for-bulls-to-panic><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>ASML investors endured a brutal bear market recently. Is the rally really over?ASML is the undisputed EUV leader, benefiting from the surge in AI infrastructure investments.The Dutch company could see...</p>\n\n<a href=\"https://seekingalpha.com/article/4717080-asml-no-real-reasons-for-bulls-to-panic\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"https://static.seekingalpha.com/cdn/s3/uploads/getty_images/2151265313/image_2151265313.jpg","relate_stocks":{"LU0823421416.USD":"BNP PARIBAS DISRUPTIVE TECHNOLOGY \"C\" (USD) INC","BK4554":"元宇宙及AR概念","IE00B1XK9C88.USD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A\" (USD) ACC","IE00B19Z3B42.SGD":"Legg Mason ClearBridge - Value A Acc SGD","IE00BJLML261.HKD":"HSBC GLOBAL EQUITY INDEX \"HCH\" (HKD) ACC","IE00BKDWB100.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5H\" (SGDHDG) ACC","BK4553":"喜马拉雅资本持仓","IE00BYXW3230.USD":"PINEBRIDGE GLOBAL DYNAMIC ASSET ALLOCATION \"AA\" (USD) ACC","LU1868837565.USD":"CT (LUX) I GLOBAL EMERGING MARKET EQUITIES \"1\" (USD) ACC","BK4567":"ESG概念","IE00B775H168.HKD":"JANUS HENDERSON BALANCED \"A5M\" (HKD) INC","IE00BDRTCR15.USD":"PINEBRIDGE GLOBAL DYNAMIC ASSET ALLOCATION \"ADC\" (USD) INC A","IE00BKPKM429.USD":"NEUBERGER BERMAN GLOBAL SUSTAINABLE EQUITY \"A\" (USD) ACC","BK4147":"半导体设备","IE0005OL40V9.USD":"JANUS HENDERSON BALANCED \"A6M\" (USD) INC","LU2125154935.USD":"ALLSPRING (LUX) WF GLOBAL EQUITY ENHANCED INCOME \"I\" (USD) INC","03165":"华夏欧优股对冲","LU0384037296.USD":"ALLIANZ ASIAN MULTI INCOME PLUS \"AT\" (USD) ACC","BK4566":"资本集团","LU0057025933.USD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"AX\" (USD) ACC","LU0143863198.USD":"CT (LUX) I GLOBAL EMERGING MARKET EQUITIES\"AU\" (USD) ACC","TSM":"台积电","LU0061474705.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN \"AU\" (USD) ACC","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","03145":"华夏亚洲高息股","IE0002270589.USD":"LEGG MASON CLEARBRIDGE VALUE \"A\" (USD) INC","NVDA":"英伟达","BK4550":"红杉资本持仓","IE00BFSS8Q28.SGD":"Janus Henderson Balanced A Inc SGD-H","LU1211504680.USD":"ALLIANZ HIGH DIVIDEND ASIA PACIFIC EQUITY \"AM\" (USD) INC","LU0069063385.USD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"A\" (USD) ACC","IE0034235303.USD":"PINEBRIDGE US RESEARCH ENHANCED CORE EQUITY \"A\" (USD) ACC","IE0009356076.USD":"JANUS HENDERSON GLOBAL TECHNOLOGY AND INNOVATION \"A2\" (USD) ACC","LU0077335932.USD":"FIDELITY AMERICAN GROWTH \"A\" INC","LU0823421333.USD":"BNP PARIBAS DISRUPTIVE TECHNOLOGY \"C\" (USD) ACC","MU":"美光科技","IE00B5TLWC47.USD":"BNY MELLON LONG-TERM GLOBAL EQUITY \"B\" (USD) ACC","BK4512":"苹果概念","INTC":"英特尔","BK4549":"软银资本持仓","ASML":"阿斯麦","BK4548":"巴美列捷福持仓","LU0072462426.USD":"贝莱德全球配置 A2","LU0792757196.USD":"TEMPLETON SHARIAH GLOBAL EQUITY FUND \"A\" (USD) ACC","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","LU0541502299.USD":"ALLSPRING  EMERGING MARKETS EQUITY \"I\" (USD) ACC","LU2360032135.SGD":"ALLSPRING GLOBAL EQUITY ENHANCED INCOME \"A\" (SGDHDG) INC","LU0082616367.USD":"摩根大通美国科技A（dist）","SSNLF":"三星电子","LU0143863784.USD":"CT (LUX) I GLOBAL EMERGING MARKET EQUITIES\"DU\" (USD) ACC"},"source_url":"https://seekingalpha.com/article/4717080-asml-no-real-reasons-for-bulls-to-panic","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2462913768","content_text":"ASML investors endured a brutal bear market recently. Is the rally really over?ASML is the undisputed EUV leader, benefiting from the surge in AI infrastructure investments.The Dutch company could see topline growth returning in 2025 as it laps a transition year.Geopolitical risks due to its China exposure could hinder a more robust valuation re-rating.I explain why the recent bear market has provided another solid opportunity for long-term investors to buy more. Here's why.Pixelbizz/iStock Editorial via Getty Images ASML: Brutal Bear Market, But Don't Fear ASML Holding (NASDAQ:ASML) investors have endured a brutal summer, as ASML stock topped out in early July 2024 before collapsing over 30% through its August lows. However, robust dip-buying sentiment has been assessed above the $750 level as investors bet on a turnaround in the stock. In my bullish ASML article in June 2024, I updated that its breakout rally seemed imminent. While the breakout arrived, it quickly fizzled out as semiconductor investors considered the sustainability of the AI upcycle. In addition, the unwinding of the yen carry trade in early August intensified the pain of ASML's outward rotation. Notwithstanding its recent recovery, the stock remains almost 20% below its July highs, suggesting a significant level of caution is still observed. With the S&P 500 (SP500) closing in against its all-time highs, is the rally for ASML over as investors reassess Nvidia's (NVDA) upcoming earnings release this week? There's no doubt that Nvidia's earnings will be closely scrutinized to ascertain whether AI infrastructure stocks can continue their spectacular run. ASML Rides The AI Infrastructure Tailwinds As the provider of EUV lithography machines, ASML has a stranglehold over the supply of AI chipmaking equipment for leading-edge foundries like TSMC (TSM). Samsung (OTCPK:SSNLF) and Intel (INTC) have also attempted to catch up with the Taiwanese foundry leader, which should spur an EUV arms race as we transition into the High NA era. As a reminder, ASML emphasized that \"High NA will enable an almost three-time increase in transistor density relative to the Low NA system.\" In addition, the ASP for its High NA systems cost \"north of EUR350M\" each. Consequently, I assess the significant potential for the EUV leader to benefit from the AI arms race as hyperscalers and big tech invest more aggressively to maintain their leadership edge. Based on recent big tech earnings, it has become increasingly clear that big tech views AI as a fundamental underpinning to its growth strategy. It also views it through a long-term lens, expressing confidence in the potentially lasting impact of investing ahead of the curve or risking falling behind its peers. Therefore, I believe ASML is well-positioned to capitalize on the underlying AI growth drivers, benefiting its key foundry customers. Given the announced reduction in CapEx investments, Intel's foundry roadmap could be affected. Therefore, some investors could be concerned whether Intel's delay/reductions could affect the ramp-up of its foundry investments, potentially slowing the revenue conversion for ASML. Accordingly, ASML expects 2024 to be a \"transition\" year, as it expects to achieve a midpoint revenue of between EUR30B and EUR40B in 2025. In addition, the company has continued to record strong bookings, resulting in a total backlog of EUR39B in Q2. As a result, I believe it provides substantial clarity into the company's 2025 revenue conversion prospects, potentially lowering the execution risks. In addition, the ramp-up in AI memory demand through HBM memory solutions is also expected to provide further tailwinds for ASML. As Samsung and Micron (MU) compete against SK Hynix in the HBM space, it should spur another race to become Nvidia's preferred HBM supplier. Therefore, I assess that ASML's ability to capitalize on the AI logic and memory growth drivers should mitigate the transition risks as its customers move toward High NA models subsequently. ASML Anticipates 2025 To Be Solid ASML estimates (TIKR) As seen above, ASML's revenue growth is expected to see an inflection from 2025, aligned with management's confident commentary and outlook. The robust downstream demand from the hyperscalers and big tech has afforded more clarity to ASML's projections. While a normalization could occur from 2026, a potentially more aggressive AI investment cadence could help mitigate some of the assessed growth normalization impact. Furthermore, AI factories could be the next growth vector not encapsulated in the current forecasts as enterprise customers and smaller data centers broaden their AI adoption. However, ASML is still susceptible to US export restrictions on chips, which could hobble its sales to Chinese customers. Despite that, the recent announcement that ASML could be exempt from more harsh restrictions has helped ease investor concerns. Notably, China sales have lifted ASML's prospects, accounting for 49% of net system sales in Q2. China is assessed to be stockpiling chip equipment in anticipation of more draconian rules as a new administration takes over from the outgoing Biden administration in early 2025. Therefore, I assess that unless the market anticipates a significant deterioration in China-related sales due to more draconian restrictions, China is still expected to be a tailwind for ASML. Is ASML Stock A Buy, Sell, Or Hold? ASML price chart (weekly, medium-term, adjusted for dividends) (TradingView) ASML fell into a bear market over the past month but saw robust buying support above the $750 level as buyers returned aggressively. ASML's \"B\" momentum grade corroborates my conviction, although the selling intensity took some shine off its previous rally. However, ASML's forward-adjusted PEG ratio of 1.9 is aligned with its sector median of 1.92. It's also broadly consistent with its 5Y average of 1.83, suggesting the stock doesn't seem to be overvalued, considering its fundamentally strong thesis. The stock's \"A+\" profitability grade underpins my bullish proposition. I suggest investors consider joining the dip-buyers in early August and betting on a further rally in the stock. Risks To ASML's Bullish Thesis ASML is still priced for growth, as seen with its \"A-\" growth grade. Therefore, a marked slowdown in AI infrastructure investments could have an outsized impact on its forward bookings, resulting in a worse-than-anticipated deceleration in revenue growth. China remains a significant geopolitical headwind, potentially facing more uncertainties as a new administration assumes power in early 2025. While ASML's leading-edge equipment sales should help mitigate a slowdown in the Chinese market, it could also lead to a valuation de-rating in ASML. Rating: Maintain Buy. Important note: Investors are reminded to do their due diligence and not rely on the information provided as financial advice. Consider this article as supplementing your required research. Please always apply independent thinking. Note that the rating is not intended to time a specific entry/exit at the point of writing unless otherwise specified. I Want To Hear From You Have constructive commentary to improve our thesis? Spotted a critical gap in our view? Saw something important that we didn't? Agree or disagree? Comment below with the aim of helping everyone in the community to learn better!  Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":0,"commentSize":1,"repostSize":1,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}