ASML: Why I'm Bearish Heading Into Earnings (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

• My prior “Sell” view on ASML Holding N.V. has been playing out as the stock has not only underperformed the S&P 500 but fallen on a total shareholder return basis as well.
• Heading into Q4 FY24 earnings, I am retaining a bearish view, as more capex expectation downgrades among key foundries suggests a weak demand outlook for ASML.
• Based on historical beat vs. miss surprise data, I think ASML may surprise positively on results but disappoint in some guidance metrics.
• The bear case I see in DeepSeek is that spending on compute capacity may be reduced, which could be an eventual headwind for ASML.
• ASML stock's valuations are at a premium vs. other semiconductor equipment comps. Relative technicals vs. the S&P 500 are still in a bearish flow.

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