ASML, a Dutch business that controls the market for the equipment required to produce AI computer chips, has risen to the top of Europe’s stock market due to the worldwide artificial intelligence boom. Investors and analysts are speculating that ASML might become Europe’s first trillion-dollar company following its spectacular second-quarter performance.
Doubts about how long Google, Amazon, and other hyperscalers will continue to invest extensively in data centers, as well as whether ASML, its suppliers, and clients like TSMC and Samsung can carry out expansion plans, are major barriers.
According to Carolyn Bell, head portfolio manager for Stonehage Fleming’s Global Best Ideas, “I think it has a really good chance of being the first company in Europe to hit the trillion mark,” noting that ASML made up roughly 8% of the portfolio.
It’s not a pipe dream, according to analyst upgrades following the second quarter. Barclays, Susquehanna, and Bernstein now have 12-month price targets above $2,600 per share, which is the approximate barrier for a $1 trillion market capitalization and a 49% increase from current levels.
ASML is the only supplier of extreme ultraviolet (EUV) lithography equipment needed to print the intricate circuitry of the most sophisticated logic and memory chips. Investors liken the company’s operations to selling picks and shovels during a gold rush. ASML’s “unique assets and wide moats” make it a long-term investment, according to John Lamb of Capital Group, whose funds own around 5% of the company’s $35 billion worth of shares.
Also Read:
The Rise of Humanoid Robots with Language and Boxing Skills in Hong Kong
