ASML Growth Outlook Trimmed by Bernstein Over EUV Concerns
ASML Holding N.V. (NASDAQ:ASML) ranks among the best fundamental stocks to buy according to hedge funds. Bernstein SocGen Group began coverage of ASML Holding N.V. (NASDAQ:ASML) on June 17 with a Market Perform rating and a EUR700 price target, citing issues with the company's extreme ultraviolet (EUV) lithography division.
While acknowledging ASML's 'undisputed' superiority in EUV lithography, the company voiced concerns about the declining returns on top-of-the-line logic capital expenditures incurred by EUV lithography. In that regard, Bernstein anticipates a decline in the intensity of EUV capital expenditure.
Instead of lithography, the firm predicts that new transistor architectures and advanced packaging would propel further transistor miniaturization. The firm's estimate of EUV revenue for 2030 falls 24% below ASML Holding N.V. (NASDAQ:ASML)'s own guidance.
According to Bernstein, ASML's growth will be in line with that of Wafer Fabrication Equipment (WFE) at a compound annual growth rate of 7% from 2024 and 2030. The firm's revenue prediction for 2030 is 18% below the consensus and at the low end of the company's guidance range.
A key player in the semiconductor sector, ASML Holding N.V. (NASDAQ:ASML) specializes in lithographic systems, which employ light to etch intricate designs on silicon wafers, a crucial stage in the production of chips.
While we acknowledge the potential of ASML as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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