ASML - ASML: Market Risks Are Too Great Making A Repeat Of 2022 Likely
2024-04-23 14:03:03 ET
Summary
- Revenue and bookings declined in the first quarter as customers delayed their foundry expansion plans.
- Weakness was present in all end markets except China, which maintained demand in the quarter.
- Wall Street estimates are substantially higher than ASML guidance, and I see the potential for ASML to miss their already weak guidance.
- ASML’s share price dropped 55% in a years-long downtrend from late 2021 through late 2022, the last time they missed Wall Street expectations for multiple quarters in a row.
Investment Thesis
Semiconductor demand is expected to continue to grow to one trillion dollars per year by 2030 as the world becomes increasingly digital. ASML ( ASML ) sits directly on the critical path, without their products the leading-edge chips could not be produced. This will result in continued growth for the company through at least this decade. ASML has the strongest moat of any company in the world, leading to their near monopoly status in lithography. Additionally, they have inspection tools and a strong service revenue base....
ASML: Market Risks Are Too Great, Making A Repeat Of 2022 Likely