ASML (ASML) Has EUV to Itself. Is 41 Times Earnings Too Much?

Applied Materials (AMAT) shares dropped 7.5% after it declined to provide a wafer fabrication equipment (WFE) spending forecast, citing uncertainties. CEO Gary Dickerson expressed long-term confidence in AI-driven demand but highlighted near-term variables. Semiconductor equipment peers KLA Corp., Lam Research, and ASML Holding also fell. ASML's upcoming earnings are in focus.

Global chip stocks fell Tuesday after China's ChangXin Memory Technologies announced progress in memory chip architecture, raising competition concerns. SK Hynix and Samsung shares dropped over 7% in Seoul, while Micron and other U.S. chip stocks declined 3%. CXMT aims to launch a new server memory product by 2026, though analysts note its market share remains small.

ASML plans to increase prices of chipmaking parts for Samsung and SK Hynix by 10% for EUV and DUV lithography systems, according to a report by The Elec. The price hike will affect deliveries starting in 2024.

BofA Securities raised its price target for ASML Holding to €2,557 (US$2,915 for the ADR) and reiterated its 'buy' rating, citing higher revenue and EPS estimates due to increased pricing and unit forecasts. The broker expects ASML to deliver a 50% EPS CAGR over 2025-28E, driven by higher gross margins. ASML's system revenues are projected to grow significantly, with potential upside from higher ASP increases. BofA's estimates assume a 5% ASP increase and 2.5% input cost increase in CY28E.

Aletheia upgraded ASML (NASDAQ:ASML) citing long-term capacity and output potential, despite near-term overvaluation. The firm expects earnings per share to more than double by 2028, with free cash flow of €40-50B. Analysts highlight strong demand and raised price targets, but note risks like capacity constraints. ASML's upcoming earnings report on October 14 may impact its stock.

ASML, a Dutch semiconductor equipment maker, is set to report Q3 results on October 14. Investors focus on EUV lithography equipment orders and 2027 outlook. Q3 revenue guidance is €11B–€12B, with a market consensus of €11.66B. Q2 revenue was €9.33B, exceeding expectations. ASML raised its full-year revenue outlook to €43B–€45B. Key metrics include new bookings and EUV equipment orders, which signal long-term demand for AI-related semiconductors.