ASML Trade Call with Doubled Price Target
"Now, I'll start off today with one of them, which is ASML. We're looking at ASML and it's up 5.66% today. ASML is a company that I've covered for over a year. I was pounding the table on below $700 per share and I still believe that ASML has upside because this company is an undisputed monopoly with no second or third place. One of the reasons for the surge is that Althia Capital upgraded ASML from a sell to a buy and lifted its price target to a street high 1500 per share from 750. They cited sharply higher earnings estimates for 2026 and 2027 and strong EUV and DUV demand."
The speaker highlights ASML as an exceptional investment, emphasizing its unique monopoly in semiconductor equipment. He points out that an analyst upgrade from sell to buy came with a doubled price target from 750 to 1500, driven by higher earnings estimates and robust demand for its EUV and DUV products. This clear trade call backed by quantitative support makes ASML a strong long-term holding.
ASML Positioned for AI-Driven Memory Chip Demand
"Yeah, absolutely. And that's good news for ASML, which rose that morning quite strongly as well um to actually to a record. And that's because of a a couple of things. But first, we had an upgrade from Bernstein analysts um saying that ASML will benefit a lot from a memory chip demand, which is of course driven by AI. Um but ASML is also riding the wave of quite a lot of enthusiasm in general for tech and AI stocks this morning. Um there's still concerns about the AI bubble, but uh investors are still continuing to put money into that AI theme that we saw uh TSMC shares in particular, for example, rallying massively after Goldman Sachs lifted the price target by 35% for that company, saying that AI will be a really a multi-year growth engine for for TSMC. and ASML is a big supplier to that company."
The speaker highlights that ASML is benefiting from an upgrade by Bernstein analysts, with expectations of strong performance driven by memory chip demand and the broader AI theme. Despite some concerns around an AI bubble, the overall sentiment is bullish as ASML is seen as a key supplier in the tech ecosystem, reinforcing its near-term positive outlook.
Buy ASML on a Semicyclical Downturn
"Let's start with the top of the European stock index. We have discussed ASML already a few times here on the channel. better to buy it at a semis cyclical downturn when the market is not exuberant which gives you a better risk and reward situation because the fundamentals are likely there that ISML will hit its revenue and growth targets."
The speaker recommends buying ASML during a semicyclical downturn, arguing that lower market exuberance provides a favorable risk-reward balance. He emphasizes that the company's fundamentals support its revenue and growth target achievement, making it an attractive trade call.
ASML Benefits from European AI Optimism Post-Nvidia Earnings
"ASML, but also a lot of other AI related stocks this morning doing really well in Europe and that's obviously, as you said, read across from Nvidia's earnings. So, the company provided a very upbeat forecast. The CEO pushed back against the narrative of the of an AI bubble that's been kind of growing in the market recently. So, that's boosted all the companies in Europe that are part of this broader AI ecosystem. So ASML as mentioned and and BE semi for example which manufacture semiconductor equipment but then also companies like Lon Schneider in France that make uh all of the kind of critical equipment for data centers like uh cooling infrastructure for example in electrical equipment. So there seems to be quite an optimistic feeling in the market today around AI and that's easing some of those concerns that we have seen in recent days in recent weeks around really stretch valuations and the potential of a bubble forming and so ASML is basking in that glow for sure today."
The commentary highlights ASML's positive momentum, driven by robust Nvidia earnings and the broader AI bout in Europe. The company's upbeat forecast and the CEO's dismissal of an AI bubble narrative are seen as key drivers in bolstering market sentiment, particularly for semiconductor players in the AI ecosystem.
Swiss Sneaker Maker On Holding Forecast Boost
"We'll move on to Swiss sneaker maker on holding. Ticker omen. There's actually been up as much as 11%. This is a company backed by Roger Federer. They boosted their forecast rate for the year, better than expected. Third quarter. Asia and Europe were a big part of it. They now see revenue growing 34% this financial year. I mean, it's become one of the top performers in the sneaker world. It's even expanding to tennis. They're eating into market share of bigger players like Nike and Puma."
The segment discusses the Swiss sneaker maker with ticker OMEN, noting an 11% rise and a boosted annual forecast with expected 34% revenue growth this financial year, driven by strong performance in Asia, Europe, and expansion into tennis.
ASML Benefits from TSMC Earnings
"Indeed. Yeah, just a quick one on them. So they're reacting well or they seem to be reacting on the back of results from TSMC over in Asia today. So ASML shares rose or rising about 3% recouping some of their recent losses. TSMC had their October sales figures, which rose at the slowest pace since February last year but still came in relatively strong. The industry remains buoyant about AI-driven growth, and investors believe that one weaker month in sales growth won't rattle the sector. There's still plenty of positivity behind the sector, and that is benefiting ASML as TSMC's results are seen as strong enough to boost demand for some of ASML's products."
ASML is seeing a rebound, with shares up about 3% as investors react positively to TSMC's October sales figures. Despite a slight slowdown in TSMC's growth, the broader semiconductor industry's optimism—particularly around AI-driven growth—is supporting ASML's performance. This short-term rebound suggests increased demand expectations for ASML's cutting-edge products.
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.