Experts find promise in their assessment.
ASML's Q2 Results and Future Outlook
In the tech industry, ASML Holding NV, a Dutch company that supplies photolithography machines essential for semiconductor production, has been making headlines. Recent developments suggest a potential upward pressure on the company's stock, with industry analysts and financial institutions expressing optimism about ASML's future.
The current zone around 540 euros could be decisive for the market. A break above this level would suggest further gains, as indicated by UBS's recent upgrade of ASML to "Buy" and a raised price target of 750 euros. This bullish sentiment is further supported by the potential for annual profit growth of about 20% from 2026, once the chip cycle stabilizes and supply bottlenecks are resolved.
However, ASML's Q2 results, released earlier this year, showed a significantly weaker order intake, more than 50% below expectations. This led to a temporary dip in the stock price, with ASML's stock losing over 12% after the results due to a cautious outlook for the fourth quarter.
Despite this setback, ASML's net profit in the first half of 2025 rose by 66% to 4.65 billion euros, and quarterly sales for Q2 2025 increased by nearly 34% to 7.69 billion euros. The company is forecasting its first year of growth for 2026.
ASML's sales are heavily reliant on the Asian market, with China accounting for 27% of the company's sales in the previous year. However, India is increasingly seen as a key market for ASML's future growth.
For those interested in the technical analysis, the TradingView chart can be found at https://www.tradingview.com/x/GPAhT4OT/. Breaking above the 200-EMA and the downtrend line could attract additional buyers, making the support zones potential opportunities for a long position.
However, it's important to note that if the market does not break above the downtrend line and the last highs, it could present a selling opportunity. A break of the trend line and the highs would further confirm the long idea.
In conclusion, while ASML's Q2 results were disappointing, the company's long-term outlook remains promising. The potential for profit growth, the increasing focus on the Indian market, and the bullish sentiment from industry analysts make ASML an interesting investment opportunity. As always, it's crucial to conduct thorough research and consider all factors before making any investment decisions.
