Techquity
Technology Investor, Fundamental Research
ASML's current valuation looks concerning because TSMC, a major customer, is refusing to use its newest High-NA EUV machines for mass production. At about $400 million each, the machines are too expensive. TSMC's CEO said it has bought some and is testing them, but will use them in everyday production only when that makes financial sense. x.com x.com
ASML is not undervalued at its current valuation of about 46.4 times earnings with a PEG ratio of nearly 3. x.com
ASML has strong fundamentals, but other setups now offer better risk-reward, so most of the position accumulated through 2025 has been sold and the capital rotated elsewhere. x.com
Accelerating earnings mean ASML is not expensive right now. It trades at 24x forward earnings and 19x forward EV/EBITDA. x.com
ASML is an amazing business, but it is pricey right now. x.com
ASML's valuation does not make sense at 45-50x forward earnings unless estimates are too low by around 2x. It has always had pricing power but chosen not to exercise it; that may change, but if it does not, the multiple is hard to justify relative to other opportunities. x.com x.com
ASML is cheap against its earnings at 29x next year's, versus the 36x chip-equipment makers usually get. Fair value is $1,883 to $2,397, or 36x next year's $60.08 EPS give or take 12%, leaving the stock 9% below the low end. The read leans on forecasts, with forward earnings 104% above trailing, and is a valuation read only, with no fundamental work. x.com
ASML lacks the growth it needs, even though @mzuhair123 makes a good case that High-NA going mainstream by decade-end will strengthen its Dutch hegemony. x.com
ASML's reported inability to make enough machines for the next two years is a buy signal for the whole AI stack. Its stock still sold off despite that shortage. x.com
ASML's sharp profit growth supports its $2,100 stock valuation. Stock Analysis reports quarterly profit rose from €2.0 billion a year earlier to €4.8 billion. The new call is below the earlier $3,000 valuation based on ASML's EUV lithography monopoly. x.com
ASML may have topped, since semicap thrives on shortage and would be hit hardest in an overbuild. Then earnings acceleration from memory and fab projects stops or reverses; the labs' leading-edge chase may be at its apex, positioning is bullish and the moat is threatened. Bullishness on Korean, US and Taiwan fab projects makes sense for now. But if the cycle top is confirmed and labs change how they chase the frontier, or token deflation kills some labs, the shortage can end sooner. x.com x.com … Show more