ASML: Demand Headwinds Galore (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• Net downward consensus capex revisions of ASML's key customers - TSMC, Samsung and Intel - may imply a weaker demand outlook ahead as foundries are starting to become price-sensitive.
• Slowdown in Chinese semiconductor equipment demand may last longer than 2025 and there are no signs of this being offset by stronger net bookings activity for ASML in other segments.
• Valuations are at a 45% premium vs peers. Some of this may be justified given the company's dominant position in EUV. But the stock is also facing reduced earnings expectations.
• Relative technicals vs the S&P500 indicate the start of a new bearish trend, which I expect will lead to underperformance going into 2025.
• The amount and proportion of used system sale units is a key monitorable to track the significance of customers' pricing concerns.

Read the full article here.