ASML's AI-driven demand, High-NA EUV dominance, and solid execution support a 33% two-year price CAGR, despite near-term China risks, making it a compelling buy even at current levels. Strong Q4 results, stable 2025 guidance, and long-term projections (€44-60B revenue by 2030) reinforce ASML's leadership, with expanding gross margins and robust free cash flow generation. Geopolitical risks persist, but AI tailwinds, TSMC/Samsung demand, and High-NA EUV rollout secure ASML's position as the premier lithography supplier—current valuation remains highly attractive.
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ASML's long-term growth potential remains solid due to its dominance in the EUV lithography market and increasing AI demand, despite recent EPS estimate downgrades. Big tech companies' significant CapEx plans for AI infrastructure should benefit ASML, enhancing its growth outlook despite DeepSeek concerns. ASML's recent earnings were strong, with Q4 2024 revenue up 24% YoY and full-year 2025 revenue expected to grow by 15%.
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ASML's stock dropped 10% to $683 after the DeepSeek disruption, presenting a buying opportunity for long-term investors. Q4 2024 net sales reached €9.3B, surpassing guidance, with €2.9B from EUV and €4.2B from non-EUV systems. 2025 revenue guidance is €30B-€35B, with projected gross margins between 51% and 53%, signaling continued growth.
The artificial intelligence (AI) ecosystem was rocked recently by news that Chinese start-up DeepSeek had developed a cost-effective and competent large language model on the cheap. That revelation called into question the tens of billions of dollars that are being poured into the buildout of AI infrastructure, but it looks like the robust spending environment in the tech sector is here to stay.
Artificial intelligence (AI) investing experienced a shakeup at the end of January with the release of DeepSeek's R1 model. This model was reported to have been trained far more cheaply than its U.S. counterparts and performed similarly in some areas.
ASML has been recovering from the DeepSeek triggered selloff, as buyers accumulate while others fear. ASML's High-NA have started to make inroads into its operating performance, but may take some time to scale. China's revenue headwinds should normalize, paving the way for possibly less volatility through 2026.
DeepSeek sent shockwaves through the AI investing world recently when it announced that it trained its AI model for just $5.6 million. As a result, many investors were worried that the entire AI support industry could come crashing down.
ASML Holding N.V.'s dominant market position in advanced lithography and rising AI-related manufacturing needs are key drivers for future growth and stock momentum recovery. Recent Q4 results show strong bookings, revenue growth, and margin expansion, with a cautious yet optimistic outlook for FY2025. ASML's renewed share buyback program signals confidence in undervaluation, supporting the stock price and enhancing shareholder value.
Shares of ASML Holding (ASML 0.96%) rallied after the company's fourth-quarter earnings report showed soaring orders for the company's devices that make semiconductors. The stock has been up and down over the past year, as it has been pressured over Chinese trade restrictions and, more recently, over what impact DeepSeek could have on chip demand.