Key insights
- ASML's valuation premium over US chip equipment makers has shrunk to a decade low, even trading at a discount to Lam Research. While ASML raised sales guidance and benefits from AI-driven demand, US peers have outperformed. This relative underperformance, despite ASML's EUV monopoly, suggests potential shifts in investor sentiment within the semiconductor equipment sector, warranting monitoring for broader implications on US-listed chip stocks.
Investing.com -- ASML Holding NV is trading at its smallest premium to US chip-equipment makers in a decade, with shares priced at about 37 times earnings for the next 12 months.
The Dutch company's valuation is roughly 17% higher than Applied Materials Inc., marking the smallest premium ASML has commanded since 2014. The Amsterdam-listed firm also trades at a 5% discount to Lam Research Corp., a dynamic not seen in 14 years. Its forward price-to-earnings ratio sits just below that of KLA Corp.
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ASML remains the sole supplier of extreme ultraviolet lithography machines, which are critical to advanced semiconductor manufacturing.
The company's shares have rallied 36% year-to-date on optimism around AI-driven data center demand. However, its US peers have climbed more, with Applied Materials and Lam Research both gaining over 50%.
ASML trades at 31 times next fiscal year's earnings, above its five-year average of 22 times. On Wednesday, the company also raised its sales guidance for the year.