Is ASML Holding (ASML) A Reddit Stock with High Potential?

Yahoo

17-04-2025

We recently published a list of the . In this article, we are going to take a look at where ASML Holding N.V. (NASDAQ:ASML) stands against other Reddit stocks with high potential.
On April 15, Monica Guerra, Morgan Stanley Wealth Management Head of US Policy, joined 'Closing Bell Overtime' on CNBC to discuss how investors should avoid knee-jerk reactions when it comes to volatility. Monica Guerra pointed out the significance of focusing on President Trump's statements, as they contribute to market volatility despite their mixed and unclear nature. She acknowledged that deciphering his comments is challenging because they lack clarity but staying attentive to both presidential statements and congressional actions is still crucial. She stressed that policy certainty might emerge once Congress finalizes the budget, which is expected around August this year.
She also emphasized that while the day started positively with markets up by 0.79%, the situation otherwise remains uncertain. She reminded clients that the 90-day reprieve on tariffs is not the end of the story and the ongoing studies on semiconductors could lead to additional pressures related to tariffs and market volatility. Guerra noted that tariff revenues are being considered as funding sources for tax cuts and this interplay between tariffs and taxes could influence market volatility. On discussing future developments in tariff policy, she mentioned that more than 70 countries have approached President Trump in attempts to renegotiate the universal 10% tariff and reciprocal tariffs. She cautioned that even if reciprocal tariffs are eliminated and only the universal tariff remains, additional increases could be highly inflationary. China's effective tariff rate is already at 145% and adding reciprocal tariffs could push inflationary pressures further.
Guerra advised clients against reacting impulsively to such news and encouraged them to focus on long-term investment goals.
We sifted through Reddit threads to make a list of the top stocks with the highest analysts' upside potential (at least 30%) as of April 15. The stocks are ranked in ascending order of their upside potential. We have also added the hedge fund sentiment for each stock, as of Q4 2024. The hedge fund data was sourced from Insider Monkey's database which tracks the moves of over 1000 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A technician in a clean room working on a semiconductor device, illuminated by the machines.
Number of Hedge Fund Holders: 86
Average Upside Potential as of April 15: 33.38%
ASML Holding N.V. (NASDAQ:ASML) provides lithography solutions to develop, produce, market, sell, upgrade, and service advanced semiconductor equipment systems. It offers lithography, metrology, and inspection systems. It also offers hardware, software, and services to chipmakers to produce the patterns of integrated circuits.
On March 14, TD Cowen analyst Krish Sankar reaffirmed a Buy rating on the company while maintaining an €825 price target. The rating came from ASML's strong position in lithography, which is essential for producing cutting-edge chips for applications like AI and HPC. ASML drives most of its revenue from its EUV Lithography Machines segment, where it holds a 100% market share.
In the full year 2024, EUV system sales reached €8.3 billion at ASML. This accounted for 44 systems, which included High NA EUV.In Q4 2024 alone, EUV sales generated €2.9 billion, with revenue recognized on two High NA systems. The NXE:3800E (Low NA EUV) also showed strong performance. In the long-term, ASML Holding (NASDAQ:ASML) projects a 2030 revenue opportunity of €44 to €60 billion, with EUV systems driving this expectation.
Baron Fifth Avenue Growth Fund is optimistic about ASML Holding (NASDAQ:ASML) due to its monopoly in critical lithography and stated the following in its Q4 2024 investor letter:
'ASML Holding N.V. (NASDAQ:ASML) is a Dutch company that designs and manufactures photolithography equipment for semiconductor manufacturing. While ASML is the leader across all types of lithography, most importantly, it is the only manufacturer of extreme ultra-violet lithography tools, which are critical for the manufacturing of leading-edge chips. Shares fell 16.6% during the fourth quarter (finishing the year down 7.7%) on reduced guidance for 2025 as well as growing investor concerns about the potential impact of U.S. government restrictions on Chinese demand and the possibility of peaking lithography intensity. Despite near-term noise, we believe that the growing demand for chips in general and AI chips in particular will continue to support long-term growth for the wafer fab equipment industry with ASML's competitive positioning remaining unassailable. While lithography as a percentage of capital expenditure may decrease from current levels, the chip layer count requiring lithography will continue to increase, in our view, as chips continue to become more complex. As a monopoly on critical lithography tools supporting an industry with growing demand fueled by the proliferation of AI, we see strong long-term upside for ASML.'
Overall, ASML ranks 12th on our list of the 12 Reddit stocks with high potential. While we acknowledge the growth potential of ASML, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ASML but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.