ASML Stock (NASDAQ:ASML)
According to S&P Global Market Intelligence data, ASML stock (NASDAQ:ASML) has risen as high as 18.4% this week. The earnings report from the semiconductor equipment manufacturer was quite positive, and the business expressed no worry about the new export restrictions from the United States to China. By Thursday’s closing on October 20th, ASML stock had risen by 15.3% over the week.
What’s the Reason?
Last week, ASML announced its quarterly profits on Wednesday. The 5.78 billion Euros in revenue increased from the 5.4 billion Euros in the same period last year. It was also above the 5.41 billion Euros predicted by industry experts. The company’s net income of 1.7 billion euros for the quarter was higher than the 1.42 billion euro average estimate made by market analysts. Investors were too gloomy about ASML’s outlook this quarter before the report; these two statistics are the primary reason the stock rose after the report was released.
In addition to these remarkable financials, ASML’s management also provided insight into China’s recent export limits on semiconductor equipment by the United States government. As a result of the new regulations, ASML has instructed all of its American employees to leave the country.
As a result of this new regulation, shareholders opted to dump their ASML stock, sending the company down nearly 10% in a single week. A pleasant surprise was that ASML’s management predicted the new export limitations would not affect the company’s 2023 equipment sales, as stated in this report.
It’s no secret that ASML’s cutting-edge semiconductor equipment machines have pushed the boundaries of what’s possible in things like data centers and smartphones. As a result of geopolitical concerns, the United States government does not want ASML to sell this sophisticated equipment to China. This led many investors to fear that ASML’s sales might suffer. The company’s present manufacturing capacity depends on demand from clients, including Taiwan Semiconductor Manufacturing, Intel, and Samsung.
So What Happens Now?
Despite being a significant player on the international stage, ASML stock has a relatively straightforward investment thesis. Because the corporation has cornered the market on cutting-edge semiconductor manufacturing technology, no other supplier can be relied upon by those wishing to produce cutting-edge computer chips. ASML benefits from stable demand, the absence of competition, and the ability to set its own prices. The firm has grown steadily financially in the previous decade thanks to this simple formula.
Whatever happens in China, ASML’s company should be good as long as there is still a need for cutting-edge computer chips throughout the globe.
Featured Image- Megapixl @ Joeppoulssen
Author Shariq Khan 
