Fund manager Marcus Morris-Eyton said that European chip stock ASML is “almost in a quasi-monopoly position” and will drive the development of artificial intelligence in the next decade. ASML, a $380 billion Dutch company also listed in the United States, makes the machines needed to make the world’s most advanced chips. Its customers include TSMC, which makes artificial intelligence chips designed by Nvidia, AMD and Intel, as well as Samsung and SK Hynix. The company dominates the market for lithography equipment, a core step in the wafer manufacturing process in which light beams are used to create circuits on wafers. It is also currently the only supplier of extreme ultraviolet, or EUV, machines needed to make next-generation wafers as small as three nanometers. Maurice Ayton, co-fund manager of AllianceBernstein’s European Growth Portfolio, said that after a very strong 2023, ASML is going through a transition year due to overcapacity in the semiconductor manufacturing sector. “. The U.S.-listed stock is set to gain 25.6% in 2024. It has also invested in chip industry giants Infineon, BE Semiconductor and VAT Group. ASML 1Y line The company’s first-quarter sales in April fell short of expectations, but its profits exceeded expectations. Shares fell 7% on the day as the company provided what analysts called “soft” guidance for the quarter. However, with ASML maintaining its sales target for next year, Wall Street analysts say any pullback in the stock price should be viewed as a buying opportunity. Wall Street Analysts’ Views UBS analysts led by Francois-Xavier Bouvignies said in a research report: “We are also bullish on ASML as we believe EUV orders from TSMC and other memory manufacturers will be completed in the next few quarters. . means that the group will not achieve its 2025 revenue guidance of 35 billion euros. Bank of America analysts Didier Scemama and Marie Ganneval said in a research note: “We do not expect any change in (2024 earnings per share consensus). “We are not investing in ASML for the 12-month outlook,” he told CNBC Pro. “We invested in ASML because their technology is almost a quasi-monopoly, which will accelerate the development of many technologies such as artificial intelligence in the next decade and decades.” Earlier this week, the company joined forces with Belgian chip research company Imec Cooperated to open a next-generation lithography equipment testing laboratory. The laboratory in Veldhoven, the Netherlands, which has been under construction for many years, will provide leading wafer manufacturers and other equipment and materials supply companies with early access to the 350 million euro ($380 million) tool, the first of its kind. The first tool in . The new “high numerical aperture” tool can increase resolution by 60% and is expected to lead to a new generation of smaller, faster wafers. The company reiterated that it expects customers to begin using the tool for commercial manufacturing starting in 2025. “Ultimately, if you need artificial intelligence, if you need (electric vehicles), if you need data centers, you need more chips,” Morris-Ayton added. “That means you need more EUV tools, and ASML is the only provider that can do that.” Wall Street analysts expect ASML’s U.S.-listed share price to rise 13% in the next 12 months, according to FactSet. Shares rose from the current price of $950 to $1,076. European trading shares are expected to rise 15.7% to 1,050 euros per share over the same period.
