San Jose, California – 2024 has proven to be a remarkable year for semiconductor stocks, with a strong bullish momentum not only limited to chip companies. Other businesses in the niche of AI-powered technology have also seen significant gains. Goldman Sachs analysts have even coined a term for these stocks, referring to them as “GRANOLAS” stocks, such as GSK, Roche, ASML, Nestle, Novartis, Novo Nordisk, L’Oreal, LVMH, AstraZeneca, SAP, and Sanofi, all contributing to high-momentum trends across Europe.

Among these companies, ASML stands out as the third most valuable company outside the US. With a hold rating on the stock, investors have witnessed a more than 25% return year-to-date through mid-March. However, concerns arise as the valuation becomes stretched and certain technical indicators suggest a potential pause in the uptrend.

ASML, a market leader in lithography tools critical for semiconductor manufacturing processes, has seen a surge in revenue and order intake. The company’s dominance in EUV lithography, with close to a 90% market share, positions it well for future growth. Despite a strong performance in Q4 2023, ASML’s guidance for 2024 remains cautious, indicating potential challenges in an evolving industry landscape.

Analysts project a slight decline in earnings for ASML this year, followed by a sharp rise in FY 2025. While the company’s top-line growth is expected to soar in 2025, dividends remain low. Valuation metrics suggest stretched levels, signaling caution for potential investors.

Looking ahead, ASML’s technical indicators are mixed, with both bullish and bearish signals present. Share-price momentum remains strong, but concerns over potential corrections and bearish divergence in RSI momentum raise flags for investors. Overall, ASML’s uptrend persists, but caution is advised for those monitoring the stock’s performance.

Taking into account the latest corporate events and earnings updates, investors in ASML should remain vigilant for any market shifts or developments that could impact the stock’s performance. With key support levels identified and potential entry points for investors, ASML’s future remains uncertain, with both opportunities and risks lying ahead.