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Publication date: Jan. 30, 2025
ASML is the largest player in the AEX and has been very popular with investors for years. Hence, we have paid attention to this fine company before. Today an update because ASML has not only experienced a lot in the past six months but also experienced another spectacular week.After the Chinese bomb from DeepSeek and the record figures published on Wednesday, ASML seems to be done with the correction and we can start preparing for the next ride up.
The previous article on ASML from October 17, 2024 can be read here:
ASML: Fantastic opportunities ahead
A brief review of ASML's share price
What turbulence the company and its share price had to endure over the past year. In the technology sector, one is used to some volatility but ASML had to endure a very turbulent correction. In July 2024, the time had come; ASML's share price reached the iconic milestone of €1,000.
Within four weeks, the price was already at €650. After highly volatile weeks in which the price climbed back up to €800, it reached €600 after the disappointing quarterly figures were accidentally released earlier than expected. Since the end of November, the share price climbed again to
€ 750,- until last week the long-known Chinese DeepSeek made a big dent in Western high-tech.
ASML fell 17.8% in a few days. On Wednesday, ASML came out with great figures, expectations, and news and the share price has already risen 16.8% from its lowest point €618.- to € 722. So much for the roller coaster of the past six months in which investors could get their chests wet at ASML.
What is the current situation at ASML?
Based on the quarterly report that ASML published Wednesday, the situation is excellent. The order book is much fuller than expected. However, ASML thinks the progression within the order book quarterly is too short. From now on, this will be reported every year. Last quarter was above expectations and sales were at record levels. Last year sales were up and the margin is in order. For 2025, the outlook is positive with a further increase in sales and a flat margin. In addition, ASML is raising the dividend.
We mentioned DeepSeekearlier. Briefly, this is the Chinese variant of the well-known American artificial intelligence software such as ChatGPT and Gemini. DeepSeek could offer the same thing at a much lower cost because it can use less sophisticated chips. This could make ASML's technology less in demand. DeepSeek's claim remains to be seen but could become a threat to the high valuation of well-known Western high-tech funds such as ASML.
What is ASML's expectation for 2025
In the October 17, 2024 article, we indicated that a position could be considered but that a sizeable interim decline should not be ruled out. This fall would again be a good buying opportunity as the price target is at €970 with a long-term runout to €1,100.
This view still stands. With the course of the price in recent months, there are new levels at which the position can still be taken or extended. Below is the chart of ASML from its July top at € 1,021.
Our mathematical system gives as the most likely scenario a slight correction from the € 722 to the € 680-€ 660 zone. Offensive-minded investors may consider taking the position there. A closing position below € 600 gives a temporary neutral position as the price at that point could fall through to € 520.
A breakout at a closing price above € 752 gives a good opportunity to take or extend the position. At that point, price action confirms the end of the major correction and we can move on to the target price.
Conclusion
ASML is a wonderful company in a sector with a golden future. The sector is very dynamic and therefore has high volatility. In turbulent times, it is important to stay on top of emotions and to strike at those moments when the going gets tough. ASML has faced headwinds but continues to grow and express positive expectations. With a price between € 650 and € 750 and a target price of € 970 for 2025, this is the period to consider buying ASML or expanding in the portfolio. For the longer term, the price target stands at € 1,100. For investors who can withstand considerable interim price fluctuations, a bright future awaits, according to our model.
On April 16, the figures for the first quarter of 2025 are expected.
Disclaimer: Investing involves risks. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts' own insights and experiences. They are therefore for educational purposes only.
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