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ASML Holding (ENXTAM:ASML) Is Down 6.0% After Rising Chinese DUV Rivalry Meets High NA EUV Progress

Simply Wall St · 2d ago
  • In recent days, ASML Holding has faced reports that Chinese state-backed firms have begun mass-producing immersion deep ultraviolet lithography machines, a technology area where ASML has historically been the primary global supplier.
  • At the same time, ASML has highlighted progress at the leading edge of chip production, with Intel Foundry using its High NA EUV systems in high-volume manufacturing for select Intel Core Ultra Series 3 processors on the Intel 18A node.
  • We’ll now examine how rising Chinese competition in DUV lithography may affect ASML’s previously optimistic AI-driven, High NA-focused investment narrative.

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ASML Holding Investment Narrative Recap

To own ASML today, you generally have to believe that its High NA EUV leadership and AI-related chip demand matter more than cyclical swings in older tools. The recent reports of Chinese immersion DUV production speak directly to the biggest near term risk around China exposure and tool competition, but do not yet change ASML’s key catalyst, which is successful High NA ramp and customer adoption at advanced nodes.

The most relevant recent announcement is Intel Foundry’s move into high volume manufacturing of select Intel Core Ultra Series 3 processors on the Intel 18A node using ASML’s High NA EUV systems. This sits at the heart of the bull catalyst that ASML’s value increasingly comes from cutting edge EUV and High NA platforms, potentially cushioning any pressure on legacy DUV demand from China or future export restrictions.

Yet in contrast to the High NA progress, the possibility of Chinese DUV tools slowly eroding parts of ASML’s China revenue base is something investors should be aware of...

Read the full narrative on ASML Holding (it's free!)

ASML Holding's narrative projects €60.9 billion revenue and €22.2 billion earnings by 2029. This requires 21.8% yearly revenue growth and about a €12.2 billion earnings increase from €10.0 billion today.

Uncover how ASML Holding's forecasts yield a €1838 fair value, a 29% upside to its current price.

Exploring Other Perspectives

ENXTAM:ASML 1-Year Stock Price Chart
ENXTAM:ASML 1-Year Stock Price Chart

Some of the most cautious analysts were already modeling only about €42.8 billion of revenue and €14.7 billion of earnings by 2029, and when you add today’s China DUV headlines to that more pessimistic view of geopolitical risk and rising local competition, it shows how differently you and other shareholders might frame ASML’s future and why it can be useful to weigh several narratives before deciding what you believe.

Explore 25 other fair value estimates on ASML Holding - why the stock might be worth as much as 40% more than the current price!

Reach Your Own Conclusion

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.