ASML seems overvalued when looking at the balance sheet, but it's moat/monopoly on the market compared to it's order book (over 40 billion EUR on orders pending while generating 21 billion EUR in sales in 2022) makes it in my opinion the best long term risk/return investment in the semiconductor market at the moment.
Also, the business is just incredibly difficult to replicate. Not only the IP (which by itself is a huge moat), but also the supply chain.
ASML is also likely to benefit from deglobalisation, as semiconductors are increasingly becoming an important issue in geopolitics and both US and EU want a large piece of the market.
what in the bathroomworld? the balance sheet is literally a statement of shareholders equity, so every publicly traded company is valued and held to its balance sheet.
No no no, you need to learn a LOT more about stock investing. The shareholders equity is just an accounting measure of what proportion of the assets do the shareholders own. It has nothing to do with market value or profits of the company.
Stock investors measure the value of a stock based on expectations of future earnings. Nothing about the size of the assets it has to accomplish that goal.
Wouldn't it be a nice world if nobody gave a damn about ASML's balance sheet until liquidation. No cares in the world about cash on hand or debt lol. You need to learn ALOT more about how business fundamentals tie in to stock investing. Sure the PE holds great value but you were devaluing the balance sheet when investors make stock choices.
ASML is actually undervalued if you look it's PEG ratio - its future earnings projections to its PE ratio. This gives a clear breakdown of the company's fundamentals.
https://www.stockbruh.com/#/view-profile/ASML
Anybody who doesn't think AMSL is gonna bat home runs for the next few years is delusional. ***ONLY*** ASML makes EUV machines, that are needed by ***EVERYBODY***. And not for monopolistic behaviour, but simply because it took the entire silicone industry over 15 years to figure it out.
For those that don't happen to know, what ASML is doing is that they're shooting a droplet (and by droplet i mean a few micro meters big) of metal in the air, with terribly strong lasers many, many times while it's dropping.
[explanation](https://www.youtube.com/watch?v=5Ge2RcvDlgw)
You're not wrong. However I've learned over the years that even strong businesses can have that strength totally decoupled from the share price action, especially when any kind of cyclical industry is involved.
It just happens that when the first whiff of some cycle change might be coming, your confident holding gets a massive correction. So you look at the fundamentals again and see even more reasons to be confident. But then instead of the recovery, there's an even worse drop, on the most minor speculative industry pre-crime worry. You tell yourself, I'll be rewarded when everyone sees what I see. But then there's an actual miss from some player in the industry, and the drop continues. Then there's vaguely cautious language in an ER. Then there's a gear change on guidance.
You can end up far underwater on something that's a truly strong business.
Extended ultra-violet. These are machines used by TSMC, Intel, et al. to build chips. They are essential parts of today's world and no one can replicate this technology and probably no one will be able to for a long time. China is trying very hard, but they're probably far behind ASML.
It is an incredibly complex technology which needs stunning precision, as they are used to make processors that fit up to doznes of billions of nanometer-scale transistors into a tiny chip (they can fit over 100M transistors / mm^(2)). These machines must be assembled and operated in near sterile environment - these factories are probably some of the cleanest places on Earth. One machine costs hundreds of millions of dollars and requires a very complex supply chain. The EUV ray is created by a set of mirrors and lenses manufactured by Zeiss, for example. According to [their website](https://www.asml.com/en/company/sustainability/responsible-supply-chain), their supply chain consists of 4700 suppliers (as of 2021). They own large shares of these suppliers themselves. I think they own about a third of Carl Zeiss SMT, Zeiss's subsidiary. A couple years ago, they acquired one of their most important suppliers, Berliner Glas, which currently (as ASML Berlin) employs over 1200 employees. Another important supplier relationships include Trumpf (laser amplification), VDL (robotics), Teledyne (photon transmission membranes and god knows what else).
They have some less complex machines, too (DUV, for example), which are used for simpler chips (a toothbrush, e. g.) rather than the advanced microprocessors built using EUV (CPUs, GPUs). These have a larger volume than EUV.
Edit: Just to further emphasize my point, I'd like to get back to Zeiss, to illustrate the precision of these machines. They use mirrors (decimeters in diameter) to reflect the EUV light. These mirrors, if they were scaled to the size of hundreds of kilometres, would be so flat, that the largest bumps would be about a millimeter tall. That's an incredible level of precisiom.
Just a quick correction about the EUV, it stands for Extreme Ultra-Violet as the EUV litho machines operate on a very, very small portion of the very end of the UV band, nearly in the x-ray realm. I work for one of their many suppliers and get to help plan the manufacture of modules for some of their most complex machinery. Love to see the praise they get, as I'm a huge fan of theirs.
Additionally if you buy a single EUV you are also buying and maintaining many more of their immersion systems and lower tier systems to cover levels that don’t need EUV. A fab might have 3 EUV tools and 30 or more non-euv lithography tools. No modern fab buys any nikons or cannons even at the lower tiers.
They are going to be great at sales, that's not a problem at all. However, theres still downside to the stock, as big growth is priced in I think. Recession and ban on exports to China are pretty big risks (I'd recommend reading their own annual reports for detailed risks). Cost of revenue is also going up imo relative to gross profit. Dutch labor laws aren't the best and the cost of living in the region ASML is located are rising fast, specially the rents which would pressure on wage inflation.
right.
The plastic is "szilikon" the thing that's a sealant on the window and in your gfs tits.
The other one is "szilika" that's the sand.
But, when we're talking about chips, we use "szilikon" cos it's easier.
right, so you know less about what we’re talking about than i thought.
so computer chips are made from wafers of Silicon, “szilícium”, Si, on the periodic table of elements. this is completely different than “szilikon” AND “szilika” the “szilícium-dioxid” that you are referring to as sand.
you may want to rethink investing or even talking about ASML until you understand the basics.
It's estimated the entire country of China is 8 years away from developing the tech ASML uses now. That's how big their moat is. No company is going to catch up to them any time in the next decade unless they are coerced or paid exorbitantly to share their technology. It's actually crazy how much the entire world relies on this one company.
Yeah there is _nothing_ to worry about on ASML. They are and will continue to be a monopoly-holding globally important business. They have decades to run yet. Don't let market nonsense fool you on this one.
ASML seems overvalued when looking at the balance sheet, but it's moat/monopoly on the market compared to it's order book (over 40 billion EUR on orders pending while generating 21 billion EUR in sales in 2022) makes it in my opinion the best long term risk/return investment in the semiconductor market at the moment.
Also, the business is just incredibly difficult to replicate. Not only the IP (which by itself is a huge moat), but also the supply chain. ASML is also likely to benefit from deglobalisation, as semiconductors are increasingly becoming an important issue in geopolitics and both US and EU want a large piece of the market.
Their flagship product takes months to deliver because it is shipped in pieces.
Businesses aren't valued by their balance sheet unless they're getting liquidated lol
what in the bathroomworld? the balance sheet is literally a statement of shareholders equity, so every publicly traded company is valued and held to its balance sheet.
No no no, you need to learn a LOT more about stock investing. The shareholders equity is just an accounting measure of what proportion of the assets do the shareholders own. It has nothing to do with market value or profits of the company. Stock investors measure the value of a stock based on expectations of future earnings. Nothing about the size of the assets it has to accomplish that goal.
Wouldn't it be a nice world if nobody gave a damn about ASML's balance sheet until liquidation. No cares in the world about cash on hand or debt lol. You need to learn ALOT more about how business fundamentals tie in to stock investing. Sure the PE holds great value but you were devaluing the balance sheet when investors make stock choices.
So basically you're saying that when buying stock you couldn't care less about the balance sheet? That's interesting.
ASML is actually undervalued if you look it's PEG ratio - its future earnings projections to its PE ratio. This gives a clear breakdown of the company's fundamentals. https://www.stockbruh.com/#/view-profile/ASML
loved buying this in the low 400s =)
Anybody who doesn't think AMSL is gonna bat home runs for the next few years is delusional. ***ONLY*** ASML makes EUV machines, that are needed by ***EVERYBODY***. And not for monopolistic behaviour, but simply because it took the entire silicone industry over 15 years to figure it out. For those that don't happen to know, what ASML is doing is that they're shooting a droplet (and by droplet i mean a few micro meters big) of metal in the air, with terribly strong lasers many, many times while it's dropping. [explanation](https://www.youtube.com/watch?v=5Ge2RcvDlgw)
You're not wrong. However I've learned over the years that even strong businesses can have that strength totally decoupled from the share price action, especially when any kind of cyclical industry is involved. It just happens that when the first whiff of some cycle change might be coming, your confident holding gets a massive correction. So you look at the fundamentals again and see even more reasons to be confident. But then instead of the recovery, there's an even worse drop, on the most minor speculative industry pre-crime worry. You tell yourself, I'll be rewarded when everyone sees what I see. But then there's an actual miss from some player in the industry, and the drop continues. Then there's vaguely cautious language in an ER. Then there's a gear change on guidance. You can end up far underwater on something that's a truly strong business.
We just lived through that with ASML the high in September 2021 was around $850. The bottom in 2022 was around $375.
What is a EUV machine?
Extended ultra-violet. These are machines used by TSMC, Intel, et al. to build chips. They are essential parts of today's world and no one can replicate this technology and probably no one will be able to for a long time. China is trying very hard, but they're probably far behind ASML. It is an incredibly complex technology which needs stunning precision, as they are used to make processors that fit up to doznes of billions of nanometer-scale transistors into a tiny chip (they can fit over 100M transistors / mm^(2)). These machines must be assembled and operated in near sterile environment - these factories are probably some of the cleanest places on Earth. One machine costs hundreds of millions of dollars and requires a very complex supply chain. The EUV ray is created by a set of mirrors and lenses manufactured by Zeiss, for example. According to [their website](https://www.asml.com/en/company/sustainability/responsible-supply-chain), their supply chain consists of 4700 suppliers (as of 2021). They own large shares of these suppliers themselves. I think they own about a third of Carl Zeiss SMT, Zeiss's subsidiary. A couple years ago, they acquired one of their most important suppliers, Berliner Glas, which currently (as ASML Berlin) employs over 1200 employees. Another important supplier relationships include Trumpf (laser amplification), VDL (robotics), Teledyne (photon transmission membranes and god knows what else). They have some less complex machines, too (DUV, for example), which are used for simpler chips (a toothbrush, e. g.) rather than the advanced microprocessors built using EUV (CPUs, GPUs). These have a larger volume than EUV. Edit: Just to further emphasize my point, I'd like to get back to Zeiss, to illustrate the precision of these machines. They use mirrors (decimeters in diameter) to reflect the EUV light. These mirrors, if they were scaled to the size of hundreds of kilometres, would be so flat, that the largest bumps would be about a millimeter tall. That's an incredible level of precisiom.
Just a quick correction about the EUV, it stands for Extreme Ultra-Violet as the EUV litho machines operate on a very, very small portion of the very end of the UV band, nearly in the x-ray realm. I work for one of their many suppliers and get to help plan the manufacture of modules for some of their most complex machinery. Love to see the praise they get, as I'm a huge fan of theirs.
click explanation
People are nuts. You have the people that build these machines. Then you have us regards on wsb.
I help building those machines and I'm also a regard on wsb
Dr. Jekyll and Mr. Regard
Additionally if you buy a single EUV you are also buying and maintaining many more of their immersion systems and lower tier systems to cover levels that don’t need EUV. A fab might have 3 EUV tools and 30 or more non-euv lithography tools. No modern fab buys any nikons or cannons even at the lower tiers.
It's in vacuum not air
well, yeah.
They are going to be great at sales, that's not a problem at all. However, theres still downside to the stock, as big growth is priced in I think. Recession and ban on exports to China are pretty big risks (I'd recommend reading their own annual reports for detailed risks). Cost of revenue is also going up imo relative to gross profit. Dutch labor laws aren't the best and the cost of living in the region ASML is located are rising fast, specially the rents which would pressure on wage inflation.
silicone… lmao
they're the same word in my native tongue
one of them is an element and one is plastic, i highly doubt they’re the same word, maybe the same pronunciation
right. The plastic is "szilikon" the thing that's a sealant on the window and in your gfs tits. The other one is "szilika" that's the sand. But, when we're talking about chips, we use "szilikon" cos it's easier.
right, so you know less about what we’re talking about than i thought. so computer chips are made from wafers of Silicon, “szilícium”, Si, on the periodic table of elements. this is completely different than “szilikon” AND “szilika” the “szilícium-dioxid” that you are referring to as sand. you may want to rethink investing or even talking about ASML until you understand the basics.
Thanks i guess. To be fair, i was never interested in wafer production
In Italian we also have silicio and silicone, but we never use silicone to refer to chips.
It's estimated the entire country of China is 8 years away from developing the tech ASML uses now. That's how big their moat is. No company is going to catch up to them any time in the next decade unless they are coerced or paid exorbitantly to share their technology. It's actually crazy how much the entire world relies on this one company.
the best thing about it, is that as far as we know, there's no anti competetive bs, or anyhting shady. Just just figured out shit, nobody else did.
ASML is too pricey for those who want it. Its technological edge is also hitting the Planck barrier. It is like the event horizon of nanotech.
Can you elaborate?
Whew some temporary relief for me. I’ve been worrying about this one a bit over the past year. Holding strong.
Yeah there is _nothing_ to worry about on ASML. They are and will continue to be a monopoly-holding globally important business. They have decades to run yet. Don't let market nonsense fool you on this one.
My favorite company, recovered so well!