ASML earnings: Focus on the long-term growth in semiconductors – Saxo Bank
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money.
Our websites use cookies to offer you a better browsing experience by enabling, optimising, and analysing site operations, as well as to provide personalised ad content and allow you to connect to social media. By choosing “Accept all” you consent to the use of cookies and the related processing of personal data. Select “Manage consent” to manage your consent preferences. You can change your preferences or retract your consent at any time via the cookie policy page. Please view our cookie policy and our privacy policy.
Chief Investment Strategist
ASML, the world’s largest semiconductor equipment maker for advanced computer chips, is done 4% as the Q1 results showed a significant miss on orders at €3.6bn vs est. €4.6bn. The company also guided Q2 revenue of €5.7-6.2bn vs est. €6.5bn. Management was quick to reaffirm its mid-term goals presented on the Investor Day 2022 in which ASML predicts 9% annualised revenue growth for the global semiconductor industry until 2030. In the presentation, ASML says the energy transition, AI, and AR/VR headsets are some of the biggest expected drivers of growth.
In its Q1 results, the company was also quick to point out that it sees a stronger second half than first half this year. Given ASML’s track record many investors have trust in the company and reiterating the expectations presented on the Investor Day 2022, means that investors are likely downplaying today’s result. The share price has also recovered more than half of the initial decline on the opening price.
How nervous should investors be about ASML’s Q1 result today? ASML has had a history of many ups and downs as the annual revenue figures since 1997 show. But it is also clear that the cyclicality of ASML’s business has declined over the years and especially since 2013 the increasing adoption of semiconductors across many applications has stabilised the growth trajectory. The red bars highlights analysts’ expectations for revenue until 2028.
In 2023 revenue hit €27.6bn and this year will only see a small increase before growth picks up again in 2025 with revenue expected at €36.2bn. Our message to investors after today’s Q1 result is to focus on the long-term. Semiconductors are getting integrated in more and more physical applications as the world gets more connected and will need more local computing power. AI and the energy transition will become key technological objectives for many countries and the increased geopolitical fragmentation will mean more localized chip production. As a result a huge capital expenditures wave is under way.
ASML is not the only way to capture the growth of semiconductors. Please check our semiconductor theme basket for more inspiration.
The success of ASML and the future returns for shareholders will rely on ASML’s ability to sustain its competitive edge in the industry. Below we list ASML’s five key competitive edges:
While ASML possesses some strong competitive advantages it is important for investors to recognize the risk factors that can negatively impact the business of ASML. Some of these risk factors are:
Global Market Quick Take: Europe – 9 July 2024
Global Market Quick Take: Asia – July 9, 2024
Bond Update: Surprise Shift in French Election Fails to Rattle Markets for Good Reasons.
Technical Update – CAC 40 and DAX testing key resitance levels. Can they break them and push higher?
What a French election upset means for the Euro
Global Market Quick Take: Europe – 8 July 2024
Weekly FX Chartbook: Focus Shifting Back to Rate Cuts
Global Market Quick Take: Asia – July 8, 2024
Sandcastle economics
Invest wisely in Q3 2024: Discover SaxoStrats’ insights on navigating a stable yet fragile global economy.
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.
Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021’s rally.
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.
Disclaimer
The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.
Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)
Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900
Hellerup
Denmark
Contact Saxo
Select region
Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.
Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.
