IBD Stock Of The Day: ASML Stock Jumps As Major Customer Agrees To Buy Its Pricey Chip Gear – Investor's Business Daily
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Emerging Pattern
Cup with Handle
A positive chart pattern named such because it resembles the outline of a coffee cup with a handle. The pattern can last from seven weeks to as long as a year, but most are three to six months.
ASML (ASML) stock is the IBD Stock Of The Day as the semiconductor equipment leader chalks up a big sale to major customer Taiwan Semiconductor Manufacturing (TSM), better known as TSMC.
On the stock market today, ASML stock hit an early-entry buy point of 992.88, based on IBD analysis. With the move higher, it broke out of a handle. The 5% buy zone extends to 1,042.52. The shares rose 9.5% to close at 1,041.34.
The early-entry buy point is within a larger consolidation pattern with a buy point of 1,056.34, according to IBD MarketSurge charts.
ASML stock reacted positively to a news report that TSMC has purchased ASML’s high numerical aperture, extreme ultraviolet lithography system. A TSMC executive had previously said the high-NA EUV machine was too expensive. The machines cost about $380 million apiece.
TSMC, the world’s largest contract chipmaker, will take delivery of the cutting-edge equipment this year, Bloomberg reported.
Meanwhile, chipmaker Intel (INTC) has already taken delivery of the first high-NA EUV system from ASML. The gear enables chipmakers to make smaller transistors with higher transistor densities than previously possible.
ASML is the world’s only manufacturer of extreme ultraviolet lithography equipment.
Analysts say TSMC is likely to use the new gear to make chips at the A14 node in 2028. The A14 node is 1.4 nanometers. The semiconductor industry measures circuit widths on chips in nanometers, which are one-billionth of a meter.
ASML stock ranks eighth out of 27 stocks in IBD’s semiconductor equipment industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 89 out of 99. IBD’s Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Further, ASML stock is on IBD’s Leaderboard.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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