Asml Stock Is Undervalued

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Asml Stock Is Undervalued

ASML Stock Is Undervalued

There's so much talk about AI and the chips. But the one company that is powering the AI supply chain is ASML! The company has the equipment that is used to make these chips.

Many big-name companies actually go to ASML to get their chips made. So, if there were no ASML, the AI revolution we see today wouldn't be possible.

ASML Stock Price Has Doubled

In the past year, the ASML stock value has doubled, but it appears the market is still underestimating the potential of ASML and its chipmaking machines.

Right now, TSMC is the largest chip manufacturer in the world. They make chips for everything from smartphones to data centers.

But, it wouldn't be possible for the TSMC to make all these chips with the machines from the ASML! The company makes lithography systems that are used to etch the circuits on the chips.

In fact, ASML has a near monopoly when it comes to the EUV machines. These tools are used by Micron Technology and TSMC to make the AI processors and memory components.

The 12-month trailing revenue of ASML has gone up by 76% since the year 2022. Looking ahead, analysts think the revenue growth will stay strong in the next few years as well.

We must also consider the fact that the demand for the chips is now way higher than the supply. This automatically means higher revenue for companies like ASML.

Based on the valuation of ASML, it is clear that significant upside can be expected. Normally, growth companies trade at a PEG of 2. But in the case of ASML, it is trading at a PEG of only 1.4.

This clearly shows that ASML stock has strong growth potential and is actually undervalued right now! The only risk to keep in mind is geopolitical conflicts or a slowdown in AI spending.

But with all things considered, it is clear that ASML stock is overlooked by Wall Street. For long-term investors, buying the ASML stock can be a very good option.

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