To The Moon

Could ASML Be Next Following Nvidia's Stock Split?

After a period with few stock splits, major companies are now showing renewed interest in them. $NVIDIA Corp(NVDA)$  , for instance, has announced a 10-for-1 stock split effective June 7, making it the fifth of the "Magnificent Seven" stocks to split its shares in under four years. $ASML Holding NV(ASML)$  , often described as "the most important tech company you've never heard of," is gaining recognition for its crucial role in semiconductor production. This growing awareness has driven its stock price to around $1,000 per share, making it one of the most expensive on U.S. exchanges. Consequently, investors are speculating whether ASML will approve a stock split this year.

Will ASML Be the Next to Do a Stock Split?

With its stock price near $1,000, ASML appears to be a strong candidate for a stock split. 

The company has seen significant price appreciation, up over 400% in the past five years and more than 1,000% over the past decade. ASML's recent price of $1027.90 is higher than Nvidia's was when it announced its 10-for-1 split. ASML, which makes equipment for chipmakers like $Taiwan Semiconductor Manufacturing(TSM)$  , has had three stock splits in its history but none since 2000. Although ASML has not indicated plans for a split, it seems likely if the stock price continues to rise.

Why is ASML's Performance So Impressive?

Since 2007, ASML has become a leader in producing extreme ultraviolet lithography (EUV) machines, giving it a significant competitive edge. Competitors like $Lam Research(LRCX.US)$ and $Applied Materials(AMAT)$   can only compete in less advanced semiconductor sectors. Companies such as Taiwan Semiconductor and Samsung rely on ASML's EUV machines to manufacture advanced semiconductors, crucial for technologies like AI. This makes ASML indispensable in the semiconductor supply chain. 

Additionally, TSMC received tens of billions in subsidies to produce these chips outside of Taiwan, which accounts for about two-thirds of the world's third-party production capacity. Consequently, ASML is likely to play a crucial role in this transition.

ASML's technical advantage positions it as a strong investment, regardless of whether it undergoes a stock split. Although stock splits don't change the intrinsic value of shares or the size of ownership, they can generate increased investor interest. ASML has a history of stock splits and has experienced significant growth since its last reverse split 17 years ago, with its stock price rising over 28-fold to its highest nominal levels ever.

A lower nominal share price from a stock split could attract smaller investors who might otherwise avoid purchasing fractional shares due to potential fees. Additionally, a stock split often serves as a bullish signal, suggesting that the company expects its stock price to continue rising. With the increasing demand for AI chips and the expansion of fabrication plants worldwide, ASML shares are likely to remain on a growth trajectory for years to come. This suggests that a near-term stock split might not be the last. Its leadership in the semiconductor equipment market and the growing demand for its cutting-edge technologies indicate a strong, ongoing bull market for ASML stock. While the nominal share price itself doesn't impact this trend, the psychological boost from a split and the potential increase in interest from small investors provide additional reasons for ASML to contemplate such a move.

@TigerStars  @CaptainTiger  @TigerWire    @Daily_Discussion  @Tiger_chat  @Tiger_comments   @MillionaireTiger