ASML undervalued relative to chip design firms
The guest argued that ASML's growth potential is conservative and underpriced relative to chip design firms like Broadcom, despite ASML being the sole supplier of critical lithography equipment.
The argument
The discussion highlighted that Broadcom is valued at roughly three times ASML despite not owning fabrication facilities, suggesting ASML's monopoly on extreme ultraviolet (EUV) lithography makes its doubling a conservative estimate. This growth is expected to lift the broader Dutch and German precision optics ecosystems.
The thesis, stress-tested
✓ What validates it
- ✓ASML upwardly revising its long-term revenue and shipment guidance
- ✓Broadening profit margins for German optics suppliers in ASML's ecosystem
▸ Risks discussed
- ▸Geopolitical tensions or domestic political opposition to ASML's expansion in the Netherlands
- ▸High energy costs hindering the German optics supply chain
Hear it yourself
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