China Sales Decline as a Catalyst
"But it wasn't all good news for ASML and ASML stock investors. They do expect to see China customer demand and therefore their total net sales in China to decline significantly in 2026 compared to their very strong business there in 2024 and 2025. So, they're telling investors they saw outsized sales in 24 and 25 and they expect that to decline significantly in 2026. This could be many customers front-loading their purchases of ASML products in China, fearful of inventory availability or restrictions, etc. And so, they frontloaded, they bought as much as they could get their hands on."
The speaker notes that ASML is expecting a significant decline in net sales in China in 2026 compared to previous years due to customers front-loading their purchases. This commentary adds a risk factor to consider for the stock, reflecting potential headwinds from reduced sales in that particular market.
Downgrade ASML from Buy to Hold
"I had ASML stock rated as a buy all year long in 2025. But yesterday, I downgraded ASML stock to a hold because of the rapid increase in share price and because of the valuation difference. Now, where I no longer see this stock as where coming into the year was closer to being fairly valued. It's now overvalued in my opinion according to my DCF calculation and when measuring on a forward price to earnings calculation."
The speaker explains a downgrade on ASML stock from a buy to a hold, citing the rapid increase in share price and overvaluation relative to his discounted cash flow model as main reasons for the change in rating.
ASML Posts Strong Orders Amid AI Boom but Faces China Headwinds
"We had seen a really massive rally in the shares over the last month or so. And by and large ASML delivered. So orders as you mentioned beat expectations in the third quarter. That was driven by massive investments in AI that kind of led to growing demand for the chips. The boom in AI spending is a direct boost for ASML because it is the only company that makes the very specific machines needed to produce the most sophisticated chips. There is one tougher spot which is China; the outlook for 2026 in general is cautious because sales to China are expected to decrease significantly due to restrictions on what it can sell."
The commentary emphasizes ASML's strong performance with orders beating expectations, fueled by AI-related demand, while also noting a significant caution due to expected declines in sales to China because of regulatory restrictions.
ASML as a Solid Buy Despite Volatility
"Number three of companies that will continue to lead in this AI revolution is ASML. This is a company that I believe will continue to compound above 15% over the next 5 years. I think that you could safely buy it under $1,000 and expect positive returns. But note that there could be a lot of volatility after every quarter."
Carlson highlights ASML as a strong long-term play given its predictable install-based management revenue growth and long-term compounding potential, cautioning investors about short-term quarterly volatility due to geopolitical and macro concerns.
ASML Gains Amid AI Trade Catalyst
"ASML, both the ticker and the name of the company, ... the ADR is getting a big boost from the AI trade this morning. Overnight, OpenAI announced an agreement with Korean companies Samsung and SK Hynix for special memory chips."
ASML is experiencing a pre-market surge of over 3% driven by strong AI-related catalysts, including a significant order boost following an OpenAI announcement. This illustrates the company's crucial role in chip manufacturing for the AI sector.
Semiconductor Stocks React Positively to Micron's Upbeat Outlook
"So, BE Semiconductor, for example, and ASML were in positive territory today. And that is because they were reacting to a very positive outlook for Micron technology over in the US. So, Micron makes computer memory chips and it provided a very upbeat outlook last night. It said that the AI rush, the AI boom was really a major benefit for them. And so, that is translating into a boost for some of those semiconductor equipment makers that are suppliers to Micron."
Semiconductor names such as BE Semiconductor and ASML are riding a positive wave after Micron announced an upbeat outlook, driven by the growing AI boom. The sentiment is buoyed by the expectation that increased chip demand will benefit their supply chains.
Buy ASML: Undervalued Monopolistic EUV Leader
"I bought $15,000 of ASML stock at $750 per share after their disappointing earnings report, and now the price is surging towards $1,000. I remain bullish on ASML despite the short-term drop."
The host delivers an explicit trade call recommending buying and holding ASML. He cites its dominant position in EUV lithography, undervalued price action following a short-term earnings disappointment, and solid catalysts from future growth in AI and chip manufacturing.
Hold/Buy Vertiv for Continued Earnings Beats
"They say that it would be no surprise if Vertiv beats expectations in the coming quarters... I do like the thesis on this one."
Vertiv, a supplier of power and cooling equipment to data centers, has a solid earnings beat streak and margin expansion forecasts. The analyst views it as a steady play in the tech infrastructure space, recommending continued buying or holding as data center build-out persists.
ASML: Undervalued Breakout on a Winning Streak
"And now we also have another company that\'s going up big today, which is ASML. The company is up 5% today and looks like it\'s finally breaking out after being undervalued for some time."
The host highlights ASML as a stock that is experiencing a breakout, with a noted 5% gain on the day despite having been undervalued previously. This brief commentary reinforces the company\'s value proposition and suggests that price momentum driven by underlying value could be creating a timely buying opportunity.
ASML Undervalued: Target $1,000
"I continue to believe is undervalued. It’s not at an extreme low, but I believe the ASML could trade up to $1,000. I think that's relatively fair."
The speaker is bullish on ASML, noting its resilient business model and predictable revenue cycle. He believes ASML, despite having lumpy cash flow due to accounting practices, is undervalued and has strong long-term growth potential with a target price around $1,000.