ASML's EUV Sales to Surge Despite Stock Underperformance
ASML Holding, a major player in the global semiconductor industry, has seen its stock underperform the PHLX Semiconductor Sector index since July 2022. Despite this, the company's EUV sales are expected to rise significantly in the coming years, driven by increasing demand for advanced chips.
ASML's high NA EUV lithography machines enable chipmakers to produce smaller, more advanced chips, giving it a monopoly-like position in the market. S&P Global estimates that ASML's EUV sales could rise by 49% in 2025, with further growth expected through the end of the decade. This growth is fueled by the increasing demand for chips, with leading cloud computing companies having a combined revenue backlog of over $1 trillion.
The company's underperformance is attributed to potential tariff effects and poor guidance for 2025. However, ASML stock has gained 27% in the past month due to positive Wall Street commentary and semiconductor market strength. Christophe Fouquet, the CEO of ASML Holding, will continue to navigate the company through these challenges. AI is expected to drive stronger growth in semiconductor equipment spending over the next three years, which could benefit ASML's earnings growth, potentially delivering solid gains for investors by 2028. SEMI expects spending on advanced chip production equipment to reach over $50 billion by 2028, up from $26 billion in 2024.
Despite recent underperformance, ASML Holding's EUV sales are expected to rise significantly in the coming years, driven by increasing demand for advanced chips. The company's CEO, Christophe Fouquet, will lead the company through potential challenges, with AI and growing semiconductor market expected to drive stronger growth in the future.
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