{"id":27439,"date":"2023-06-26T02:22:44","date_gmt":"2023-06-26T06:22:44","guid":{"rendered":"https:\/\/ifintechworld.com\/news\/after-the-ai-boom-is-asml-worth-an-investment-nasdaqasml\/"},"modified":"2023-06-26T02:22:47","modified_gmt":"2023-06-26T06:22:47","slug":"after-the-ai-boom-is-asml-worth-an-investment-nasdaqasml","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=27439","title":{"rendered":"After The AI Boom, Is ASML Worth An Investment? (NASDAQ:ASML)"},"content":{"rendered":"
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ASML Holding N.V. (NASDAQ:ASML<\/span>) delivered strong Q1 2023 results, beating analyst consensus estimates with regards to both topline and earnings. Although the strong January quarter is appreciated, investors are likely looking beyond the short-\/mid term financial results, and try to price how the world’s leading manufacturer of photolithography equipment will likely be influenced by the AI tailwind – with the stock up by ~20% since Nvidia (<\/span>NVDA) delivered its bumper <\/span>guidance beat.<\/span><\/p>\n

Overall, I like ASML as a leading player in the semi-industry and a likely key beneficiary of the AI tailwind, which, according to my estimates, may support a ~11-12% topline CAGR through 2030, likely resulting in a 6.25% annual earnings yield based on a 38-40% EBIT margin (see analysis in section “A Note On EPS and Valuation”).<\/p>\n

For reference, ASML stock has strongly outperformed the broad market since early 2023 – ASML stock is up about 27% YTD, versus a gain of close to 14% for the S&P 500 (<\/span>SP500).<\/span><\/p>\n

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Seeking Alpha<\/p>\n<\/figcaption><\/figure>\n<\/p>\n

ASML beats Q1: Topline & Earnings<\/h2>\n

ASML reported strong Q1 2023 results, beating analyst consensus estimates with regard to both revenue and earnings. During the period from January to end of March, the world’s leading equipment maker for key semiconductor technology generated total revenues of \u20ac6.75 billion, up about 5.5% QoQ on a FX adjusted basis, and beating analyst consensus at midpoint by almost \u223c\u20ac500 million. During the period, ASML sold 96 new lithographic systems (units), one more than in Q4 2022.<\/p>\n

With regard to profitability, ASML’s gross profitability expanded ~3% QoQ, to \u20ac3.4 billion (50.5% gross margin), and net income grew ~9% QoQ, to \u20ac1.96 billion (\u20ac4.96\/share), beating consensus estimates by 81 cents ( ~20% upside surprise vs. \u20ac4.2\/ share expected at midpoint)<\/p>\n

ASML closed Q1 with less than \u20ac6.7 billion of cash, as compared to a TTM operating cash flow of about \u20ac9.7 billion.<\/p>\n

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ASML Q1 2023 results<\/p>\n<\/figcaption><\/figure>\n<\/p>\n

Strong Guidance Supports Bull Thesis<\/h4>\n

Together with a strong start in the new year, ASML also provided supportive guidance for Q2 and beyond.<\/p>\n

For Q2 2023, ASML has provided the following financial projections:<\/p>\n