Thursday’s TLDR<\/h2>\n\n- Business seems to have stabilized<\/span><\/li>\n
- But trade policy remains a risk<\/span><\/li>\n
- GME, ORCL in focus this morning<\/span><\/li>\n<\/ul>\n
Deep Dive<\/span><\/h2>\nEarlier this week, we <\/span>looked at the potential breakout<\/span><\/a> taking place in ASML. Now I want to take a deeper dive into the fundamentals.\u00a0<\/span><\/p>\nASML is a Dutch company that designs and manufactures advanced photolithography machines used in the semiconductor industry, particularly extreme ultraviolet (EUV) lithography systems that are critical for producing cutting-edge chips at nanoscale precision.<\/span><\/p>\nIn plain English:<\/b> ASML builds the machines that make the chips.\u00a0<\/span><\/p>\nThe company\u2019s largest customers include Taiwan Semi<\/a>, Intel<\/a>, Samsung, and Micron<\/a>, among others.\u00a0<\/span><\/p>\nIn mid-2024, shares of ASML topped $1,100 a share. By November though, the stock was trading in the mid-$600s, a decline of about 40%. The problem? Sentiment was fading quickly as investors worried about order demand, particularly due to restrictions on China.\u00a0<\/span><\/p>\nAlthough there have been some headwinds \u2014 management was forced to reduce its outlook last year \u2014 there seems to have been a stabilization in its business.\u00a0<\/span><\/p>\nThe Fundamentals<\/b><\/h4>\n
After just 3% revenue growth and a ~2% earnings decline in 2024, analysts expect 2025 to be much different, with estimates calling for 15% revenue growth and 23% earnings growth. Further, they expect double-digit earnings growth in 2026 and 2027.\u00a0<\/span><\/p>\n![\"ASML's](\"https:\/\/www.etoro.com\/wp-content\/uploads\/2025\/06\/ASML_Net_Income__Operating_Margins-1024x726.png\")
ASML’s Net Income and Operating Margins. Source: FinChat<\/em><\/figcaption><\/figure>\nThe Magnificent 7 companies recently reiterated their big spending plans (with a lot of investment going into AI infrastructure). Combined with the strong earnings reports from Nvidia<\/a> and Taiwan Semi, we know that demand for AI infrastructure remains strong \u2014 and that\u2019s good for ASML.\u00a0<\/span><\/p>\nThat said, the current trade environment still makes for a bumpy path forward. As my colleague <\/span>Jean-Paul van Oudheusden<\/span><\/a> wrote in April after ASML\u2019s most recent earnings report:\u00a0<\/span><\/p>\n\u201cFor Q2 2025, ASML expects slightly lower revenue of between \u20ac7.2 and \u20ac7.7 billion. Nevertheless, [CEO Christophe] Fouquet and [CFO Roger] Dassen reiterated their full-year revenue target of \u20ac30 to \u20ac35 billion. The upper end of that range could be achieved if existing orders \u2014 many driven by AI-related demand \u2014 are delivered on schedule. Uncertainty surrounding the import duties could, however, cause delays.\u201d<\/span><\/p>\nWant to receive these insights straight to your inbox?<\/strong><\/p>\nSign up here<\/a><\/p>\nASML \u2014 Valuation<\/span><\/h2>\nASML is a backbone component to the semiconductor space. If business has stabilized and the company can return to growth, then investors may view the stock as undervalued at current levels.\u00a0<\/span><\/p>\nOn the flip side, trade-policy issues or weaker-than-expected demand can continue to weigh on sentiment for the stock. Further, it could hurt ASML\u2019s financial results, which would make the valuation more expensive, prompting a potential decline in the stock price.\u00a0<\/span><\/p>\n![\"ASML's](\"https:\/\/www.etoro.com\/wp-content\/uploads\/2025\/06\/ASML_Forward_PE_Ratio-1024x726.png\")
ASML’s Forward P\/E Ratio. Source: FinChat<\/em><\/figcaption><\/figure>\nAbove is a look at the stock\u2019s forward price-to-earnings ratio (more information about valuation can be found in our recent <\/span>Fundamental Analysis Boot Camp<\/span><\/a>).<\/span><\/p>\nOn the chart above, we can see that dips below 25 times forward earnings tend to mark a trough, while pops toward 45 times earnings has been tough to sustain. Relatively speaking then, shares of ASML are historically cheap at around 25x earnings and expensive at 45x earnings.\u00a0<\/span><\/p>\nWith the recent momentum in its stock price, the valuation has rebounded. Some bulls may still find 29.2x earnings close enough to the recent trough to consider it attractively valued. Others may prefer to wait for a dip back to lower prices (knowing that the risk here is that ASML stock doesn\u2019t fall that far). Lastly, bears may view ASML as too expensive or too uncertain to invest in right now.\u00a0<\/span><\/p>\nFor what it\u2019s worth, the <\/span>consensus price target on ASML<\/span><\/a> is about $900, implying 15% upside. Still, investors must do what they feel comfortable with and determine if ASML is a stock that fits well in their portfolio.\u00a0<\/span><\/p>\n***<\/span><\/p>\nOn an unrelated side note: eToro just added four new cryptocurrencies available to trade, including: Quant, Storj, Ethereum Name Service, and SushiSwap. Check out the crypto discover page to see more.<\/a>\u00a0<\/span><\/i><\/p>\nWhat Wall Street Is Watching<\/h2>\n
SPY<\/b><\/p>\n
The S&P 500 and the <\/span>SPY<\/span><\/a> ETF continued to inch back toward record highs yesterday, coming within 1.4% of its February record. Another tame inflation report gave investors a confidence boost on Wednesday, as tariff impacts have yet to send a jolt through consumer pricing. However, stocks came under pressure in afternoon trading and are dipping again this morning on worries over global trade policy. <\/span>Check out the chart for SPY<\/span><\/a>.\u00a0<\/span><\/p>\nORCL<\/b><\/a><\/p>\nShares of Oracle are within a stone\u2019s throw of all-time highs as shares are rallying almost 10% in pre-market trading. Better-than-expected earnings and revenue results combined with an upbeat outlook due to the company\u2019s momentum in cloud and AI services. <\/span>Dig further into the company\u2019s recent news<\/span><\/a>.\u00a0<\/span><\/p>\n
Deep Dive<\/span><\/h2>\nEarlier this week, we <\/span>looked at the potential breakout<\/span><\/a> taking place in ASML. Now I want to take a deeper dive into the fundamentals.\u00a0<\/span><\/p>\nASML is a Dutch company that designs and manufactures advanced photolithography machines used in the semiconductor industry, particularly extreme ultraviolet (EUV) lithography systems that are critical for producing cutting-edge chips at nanoscale precision.<\/span><\/p>\nIn plain English:<\/b> ASML builds the machines that make the chips.\u00a0<\/span><\/p>\nThe company\u2019s largest customers include Taiwan Semi<\/a>, Intel<\/a>, Samsung, and Micron<\/a>, among others.\u00a0<\/span><\/p>\nIn mid-2024, shares of ASML topped $1,100 a share. By November though, the stock was trading in the mid-$600s, a decline of about 40%. The problem? Sentiment was fading quickly as investors worried about order demand, particularly due to restrictions on China.\u00a0<\/span><\/p>\nAlthough there have been some headwinds \u2014 management was forced to reduce its outlook last year \u2014 there seems to have been a stabilization in its business.\u00a0<\/span><\/p>\nThe Fundamentals<\/b><\/h4>\n
After just 3% revenue growth and a ~2% earnings decline in 2024, analysts expect 2025 to be much different, with estimates calling for 15% revenue growth and 23% earnings growth. Further, they expect double-digit earnings growth in 2026 and 2027.\u00a0<\/span><\/p>\nASML’s Net Income and Operating Margins. Source: FinChat<\/em><\/figcaption><\/figure>\nThe Magnificent 7 companies recently reiterated their big spending plans (with a lot of investment going into AI infrastructure). Combined with the strong earnings reports from Nvidia<\/a> and Taiwan Semi, we know that demand for AI infrastructure remains strong \u2014 and that\u2019s good for ASML.\u00a0<\/span><\/p>\nThat said, the current trade environment still makes for a bumpy path forward. As my colleague <\/span>Jean-Paul van Oudheusden<\/span><\/a> wrote in April after ASML\u2019s most recent earnings report:\u00a0<\/span><\/p>\n\u201cFor Q2 2025, ASML expects slightly lower revenue of between \u20ac7.2 and \u20ac7.7 billion. Nevertheless, [CEO Christophe] Fouquet and [CFO Roger] Dassen reiterated their full-year revenue target of \u20ac30 to \u20ac35 billion. The upper end of that range could be achieved if existing orders \u2014 many driven by AI-related demand \u2014 are delivered on schedule. Uncertainty surrounding the import duties could, however, cause delays.\u201d<\/span><\/p>\nWant to receive these insights straight to your inbox?<\/strong><\/p>\nSign up here<\/a><\/p>\nASML \u2014 Valuation<\/span><\/h2>\nASML is a backbone component to the semiconductor space. If business has stabilized and the company can return to growth, then investors may view the stock as undervalued at current levels.\u00a0<\/span><\/p>\nOn the flip side, trade-policy issues or weaker-than-expected demand can continue to weigh on sentiment for the stock. Further, it could hurt ASML\u2019s financial results, which would make the valuation more expensive, prompting a potential decline in the stock price.\u00a0<\/span><\/p>\nASML’s Forward P\/E Ratio. Source: FinChat<\/em><\/figcaption><\/figure>\nAbove is a look at the stock\u2019s forward price-to-earnings ratio (more information about valuation can be found in our recent <\/span>Fundamental Analysis Boot Camp<\/span><\/a>).<\/span><\/p>\nOn the chart above, we can see that dips below 25 times forward earnings tend to mark a trough, while pops toward 45 times earnings has been tough to sustain. Relatively speaking then, shares of ASML are historically cheap at around 25x earnings and expensive at 45x earnings.\u00a0<\/span><\/p>\nWith the recent momentum in its stock price, the valuation has rebounded. Some bulls may still find 29.2x earnings close enough to the recent trough to consider it attractively valued. Others may prefer to wait for a dip back to lower prices (knowing that the risk here is that ASML stock doesn\u2019t fall that far). Lastly, bears may view ASML as too expensive or too uncertain to invest in right now.\u00a0<\/span><\/p>\nFor what it\u2019s worth, the <\/span>consensus price target on ASML<\/span><\/a> is about $900, implying 15% upside. Still, investors must do what they feel comfortable with and determine if ASML is a stock that fits well in their portfolio.\u00a0<\/span><\/p>\n***<\/span><\/p>\nOn an unrelated side note: eToro just added four new cryptocurrencies available to trade, including: Quant, Storj, Ethereum Name Service, and SushiSwap. Check out the crypto discover page to see more.<\/a>\u00a0<\/span><\/i><\/p>\nWhat Wall Street Is Watching<\/h2>\n
SPY<\/b><\/p>\n
The S&P 500 and the <\/span>SPY<\/span><\/a> ETF continued to inch back toward record highs yesterday, coming within 1.4% of its February record. Another tame inflation report gave investors a confidence boost on Wednesday, as tariff impacts have yet to send a jolt through consumer pricing. However, stocks came under pressure in afternoon trading and are dipping again this morning on worries over global trade policy. <\/span>Check out the chart for SPY<\/span><\/a>.\u00a0<\/span><\/p>\nORCL<\/b><\/a><\/p>\nShares of Oracle are within a stone\u2019s throw of all-time highs as shares are rallying almost 10% in pre-market trading. Better-than-expected earnings and revenue results combined with an upbeat outlook due to the company\u2019s momentum in cloud and AI services. <\/span>Dig further into the company\u2019s recent news<\/span><\/a>.\u00a0<\/span><\/p>\n
ASML is a Dutch company that designs and manufactures advanced photolithography machines used in the semiconductor industry, particularly extreme ultraviolet (EUV) lithography systems that are critical for producing cutting-edge chips at nanoscale precision.<\/span><\/p>\n In plain English:<\/b> ASML builds the machines that make the chips.\u00a0<\/span><\/p>\n The company\u2019s largest customers include Taiwan Semi<\/a>, Intel<\/a>, Samsung, and Micron<\/a>, among others.\u00a0<\/span><\/p>\n In mid-2024, shares of ASML topped $1,100 a share. By November though, the stock was trading in the mid-$600s, a decline of about 40%. The problem? Sentiment was fading quickly as investors worried about order demand, particularly due to restrictions on China.\u00a0<\/span><\/p>\n Although there have been some headwinds \u2014 management was forced to reduce its outlook last year \u2014 there seems to have been a stabilization in its business.\u00a0<\/span><\/p>\n After just 3% revenue growth and a ~2% earnings decline in 2024, analysts expect 2025 to be much different, with estimates calling for 15% revenue growth and 23% earnings growth. Further, they expect double-digit earnings growth in 2026 and 2027.\u00a0<\/span><\/p>\n The Magnificent 7 companies recently reiterated their big spending plans (with a lot of investment going into AI infrastructure). Combined with the strong earnings reports from Nvidia<\/a> and Taiwan Semi, we know that demand for AI infrastructure remains strong \u2014 and that\u2019s good for ASML.\u00a0<\/span><\/p>\n That said, the current trade environment still makes for a bumpy path forward. As my colleague <\/span>Jean-Paul van Oudheusden<\/span><\/a> wrote in April after ASML\u2019s most recent earnings report:\u00a0<\/span><\/p>\n \u201cFor Q2 2025, ASML expects slightly lower revenue of between \u20ac7.2 and \u20ac7.7 billion. Nevertheless, [CEO Christophe] Fouquet and [CFO Roger] Dassen reiterated their full-year revenue target of \u20ac30 to \u20ac35 billion. The upper end of that range could be achieved if existing orders \u2014 many driven by AI-related demand \u2014 are delivered on schedule. Uncertainty surrounding the import duties could, however, cause delays.\u201d<\/span><\/p>\n Want to receive these insights straight to your inbox?<\/strong><\/p>\n Sign up here<\/a><\/p>\n ASML is a backbone component to the semiconductor space. If business has stabilized and the company can return to growth, then investors may view the stock as undervalued at current levels.\u00a0<\/span><\/p>\n On the flip side, trade-policy issues or weaker-than-expected demand can continue to weigh on sentiment for the stock. Further, it could hurt ASML\u2019s financial results, which would make the valuation more expensive, prompting a potential decline in the stock price.\u00a0<\/span><\/p>\n Above is a look at the stock\u2019s forward price-to-earnings ratio (more information about valuation can be found in our recent <\/span>Fundamental Analysis Boot Camp<\/span><\/a>).<\/span><\/p>\n On the chart above, we can see that dips below 25 times forward earnings tend to mark a trough, while pops toward 45 times earnings has been tough to sustain. Relatively speaking then, shares of ASML are historically cheap at around 25x earnings and expensive at 45x earnings.\u00a0<\/span><\/p>\n With the recent momentum in its stock price, the valuation has rebounded. Some bulls may still find 29.2x earnings close enough to the recent trough to consider it attractively valued. Others may prefer to wait for a dip back to lower prices (knowing that the risk here is that ASML stock doesn\u2019t fall that far). Lastly, bears may view ASML as too expensive or too uncertain to invest in right now.\u00a0<\/span><\/p>\n For what it\u2019s worth, the <\/span>consensus price target on ASML<\/span><\/a> is about $900, implying 15% upside. Still, investors must do what they feel comfortable with and determine if ASML is a stock that fits well in their portfolio.\u00a0<\/span><\/p>\n ***<\/span><\/p>\n On an unrelated side note: eToro just added four new cryptocurrencies available to trade, including: Quant, Storj, Ethereum Name Service, and SushiSwap. Check out the crypto discover page to see more.<\/a>\u00a0<\/span><\/i><\/p>\n SPY<\/b><\/p>\n The S&P 500 and the <\/span>SPY<\/span><\/a> ETF continued to inch back toward record highs yesterday, coming within 1.4% of its February record. Another tame inflation report gave investors a confidence boost on Wednesday, as tariff impacts have yet to send a jolt through consumer pricing. However, stocks came under pressure in afternoon trading and are dipping again this morning on worries over global trade policy. <\/span>Check out the chart for SPY<\/span><\/a>.\u00a0<\/span><\/p>\n ORCL<\/b><\/a><\/p>\n Shares of Oracle are within a stone\u2019s throw of all-time highs as shares are rallying almost 10% in pre-market trading. Better-than-expected earnings and revenue results combined with an upbeat outlook due to the company\u2019s momentum in cloud and AI services. <\/span>Dig further into the company\u2019s recent news<\/span><\/a>.\u00a0<\/span><\/p>\nThe Fundamentals<\/b><\/h4>\n
ASML \u2014 Valuation<\/span><\/h2>\n
What Wall Street Is Watching<\/h2>\n