Latest news with #SOXX
Yahoo
4 days ago
- Business
- Yahoo
Is ASML a Buy?
Key Points ASML recently gave a cautious outlook for next year. The stock trades at a multiyear low valuation. A monopoly company at an historically low valuation seems like a good pickup. These 10 stocks could mint the next wave of millionaires › Even though it has a monopoly on critical technology and the artificial intelligence revolution in full swing, ASML Holdings (NASDAQ: ASML) has lagged both the index and the iShares Semiconductor ETF (NASDAQ: SOXX) year to date, as well as over the past one, three, and five years. This is kind of an amazing statistic, given ASML's monopoly on extreme ultraviolent lithography (EUV), which is needed to produce semiconductors below the 7 nanometer (nm) node. 7nm chips began to be produced in 2019, and the industry has progressed to 2nm chips, which will arrive by the end of this year. Furthermore, all the leading DRAM memory producers are just now adopting EUV, and DRAM demand is exploding because of the memory needs of AI systems. Of course, ASML has been known to have this monopoly for a while and entered the past five years at a higher valuation than peers. Yet the stock's underperformance has changed that, and shares now look like somewhat of a bargain, at least by growth stock standards. ASML is at a decade-long discount After its recent post-earnings selloff, ASML now trades at roughly 25 times earnings. That valuation doesn't scream "cheap" on the surface. But again, ASML is an extraordinary company, and that valuation is the cheapest it has been over the past 10 years, with a few exceptions. Much of the recent selloff has to do with near-term concerns over the 2026 growth outlook. On ASML's recent earnings release, management said that while the company is still preparing for a growth year next year, it wasn't guaranteeing it. That was a change from last quarter, when ASML said it was expecting a growth year in 2026, after a strong midteens growth expectation this year. Management spoke of the overhang of tariffs, which could have both direct and indirect impacts. Tariffs may directly slow the several of ASML's end markets, as those end products are still mostly assembled in East Asia. There is also the question of Section 232 tariffs on semiconductors, which have not yet been announced. Should semiconductors get tariffed specifcally, many important chips could be directly affected, given the importance of Taiwan Semiconductor Manufacturing (NYSE: TSM) in the electronics supply chain. There are also indirect impacts on the wider economy, which could also depress overall demand. Although chips tend to have la strong long-term growth outlook, it's still a very cyclical business at times. Last Friday, we perhaps saw the first signs of tariffs' impacts on the economy, as job creation for July came in well below target, while the stronger readings from May and June were also revised down. The big innovation in chips today doesn't have to do with lithography Another part of ASML's valuation compression may have to do with the technology of chipmaking itself. Major chipmakers are now switching from finFET transistors, with the gate surrounding three sides of the transistor source, to gate-all-around transistors, in which the gate encircles the source on all four sides. This architecture also allows transistor sources to be stacked on top of each other in vertical fashion. In addition, another innovation going on right now is backside power, in which the power controls of the chip are being built on the back side of the silicon and connected through the silicon surface to the front. This frees up more space on the front of the chip, allowing greater transistor counts and performance. Lithography, which is what ASML does, has to do with shrinking transistors down to smaller and smaller sizes so that more can fit on a given piece of silicon. However, the enabling technologies of GAA and backside power have more to do with other areas of manufacturing technology, such as etch and deposition, novel packaging and wafer thinning, and increased metrology. This could be why other major semicap equipment stocks in etch, deposition, and metrology have seen their valuations go up, as ASML's valuation has come back down toward them: But near-termism has created an opportunity While the picture for 2026 and maybe the next couple of years are a bit murky for ASML, the long-term growth opportunity appears intact, as does ASML's competitive advantage in lithography. Countering the worries about a near-term slowdown in lithography intensity, ASML CEO Christophe Fouquet noted: So I think that after the 1.4 nanometer node, we will see again some litho intensity increase some more EUV layers. If you look at the long term also there, the Logic customers are extremely bullish about the need for more EUV layers. So yes, there is one node as it happened before with FinFET, where there's a bit of a pause. But I always explain the only reason for that pause is to enable more shrink moving forward. So for every node where you pause basically to change your transistor architecture, usually, you will see 3, 4, 5 nodes where you continue basically to shrink and there drive more litho intensity. Basically, the 2nm node may not see an increase in litho intensity as chipmakers focus on getting the new transistor and backside power right, but lithography intensity and shrink should still continue beyond that point into the future. On that note, ASML kept its 2030 revenue range outlook between 44 billion to 60 billion euros intact. That's relative to the 32.2 billion euros ASML has made over the past 12 months. In that scenario, ASML should be making between 14 billion and 23 billion euros in net profit by 2030, relative to its 230 billion Euro market cap today. Given ASML's technology moat and the strong long-term picture for advanced semiconductors and memory, that a seems like a very solid value for investors looking beyond the next year. Don't miss this second chance at a potentially lucrative opportunity Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $462,306!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $38,522!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $619,036!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join , and there may not be another chance like this anytime soon.*Stock Advisor returns as of August 4, 2025 Billy Duberstein and/or his clients have positions in ASML and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends ASML, Taiwan Semiconductor Manufacturing, and iShares Trust-iShares Semiconductor ETF. The Motley Fool has a disclosure policy. Is ASML a Buy? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
6 days ago
- Business
- CNBC
What is wrong with chip stocks this earnings season?
AMD shares tumbled Tuesday despite solid revenue guidance and AI chip optimism, becoming the latest semiconductor casualty in a market where solid execution simply isn't enough. This earnings season has been brutal for chip stocks: Texas Instruments , ON Semiconductor , Qualcomm , and Arm all posted results that looked good on paper, but were met with steep sell-offs as investors demanded accelerating growth and guidance that clears an ever higher bar. SOXX 1M mountain iShares Semiconductor ETF, 1 month Even Lattice Semiconductor wasn't spared. Management outlined a confident AI roadmap and said new product sales could could hit the high teens as a percentage of total revenue in 2025 - implying 70% year-over-year growth. But the numbers merely matched expectations and that was reason enough to sell. We've reached a point where 70% growth isn't good enough. The message is clear: guidance matters more than headline beats. Especially in AI, where expectations have soared and valuation premiums demand more than just "good". AMD, up over 40% this year, faced that reality. After such a run, decent numbers don't move the needle. Only blowouts do. SOXX YTD mountain iShares Semiconductor ETF, YTD With the PHLX Semiconductor index posting back-to-back weekly losses for the first time since March, chip investors are only rewarding the stocks that can deliver the most dramatic guidance surprises. With chip stocks up nearly 60% as a group off their lows in April during the global trade war scare, it also means maybe share prices for this sector are too far ahead of themselves. The next test will be Nvidia's earnings on Aug. 27.
Yahoo
06-06-2025
- Business
- Yahoo
Broadcom Slips After Earnings Beat, Drags Down Tech ETFs
Shares of Broadcom Inc. (AVGO) fell on Friday, underperforming the broader semiconductor industry and stock market despite reporting stronger-than-expected earnings after the bell on Thursday. The stock dropped as much as 4.5% during the session, giving back some of its recent gains. While Broadcom beat revenue expectations for its fiscal second quarter, the results failed to dazzle investors who had bid up the stock to record highs in the lead-up to the report. The company reported $15 billion in revenue for the quarter, up 20% from a year ago and slightly above the $14.96 billion consensus estimate. It also guided for $15.8 billion in revenue for the current quarter, just a hair ahead of the $15.7 billion analysts were expecting. In other words, the results were solid, but not spectacular. And after a 78% rally off the April lows, expectations were sky-high. The stock closed at a record on Wednesday, so some profit-taking was to be expected. Broadcom has been a major beneficiary of the artificial intelligence boom. The company designs networking products that help connect AI chips inside data centers. It also works with major tech firms like Alphabet Inc. (GOOGL) and Meta Platforms Inc. (META) to design custom AI chips, giving them an alternative to Nvidia Corp.'s (NVDA) market-dominating GPUs. That exposure to AI has helped push Broadcom's market cap north of $1 trillion, making it one of the most influential stocks in major indexes and ETFs. Broadcom is currently the sixth-largest holding in the SPDR S&P 500 ETF Trust (SPY), with a weight of 2.4%. It's the fifth-largest holding in the Invesco QQQ Trust (QQQ), at 5%. It also has heavy representation in semiconductor-focused funds, making up 10.2% of the VanEck Semiconductor ETF (SMH) and 10.1% of the iShares Semiconductor ETF (SOXX). Investors looking for a more aggressive play on the stock have also been using the Defiance Daily Target 2X Long AVGO ETF (AVGX), which offers 2x leveraged exposure to Broadcom. That fund currently has $93 million in assets under management. Despite Friday's dip, Broadcom remains a key AI bellwether and a major driver of performance for many popular | © Copyright 2025 All rights reserved Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
29-04-2025
- Business
- Yahoo
The Best Tech ETF to Invest $250 in Right Now
If you're feeling overwhelmed by the stock market right now, you're not alone. The S&P 500 had one of its fastest drops on record in early April, and the Nasdaq Composite hurtled into a bear market, falling more than 20% from its high just in February. President Donald Trump's trade war with just about every U.S. trading partner and signs of a weakening economy have put investors into a defensive position, and it's unclear when or how this period of uncertainty is going to end. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » At times like these, picking individual stocks is especially difficult so it's worth considering investing in exchange-traded funds (ETF) as an alternative. These investments trade like stocks, but they do the hard work of choosing the stocks for you, typically for a nominal fee. ETFs are either actively managed, meaning a fund manager will buy and sell the stocks inside it, or they track an index like the S&P 500. If you have $250 in available funds and you're looking for a tech ETF to invest in to capitalize on the recent sell-off, one of the best choices out there is the VanEck Semiconductor ETF (NASDAQ: SMH). The VanEck Semiconductor ETF tracks the MVIS US Listed Semiconductor 25 Index, which aims to follow the overall performance of companies in the semiconductor production and equipment industry. The ETF has a long track record of beating the market, as the chart below shows. As you can see from the chart, not only has the VanEck ETF trounced the S&P 500, but it's also beaten its rival iShares Semiconductor ETF (NASDAQ: SOXX). That gap between the SMH and the SOXX is owed to the SMH's increased concentration. The table below shows the fund's top 10 holdings. Rank/Stock Weighting Rank/Stock Weighting 1. Nvidia 19.6% 6. Texas Instruments 4.8% 2. Taiwan Semiconductor 11.1% 7. Advanced Micro Devices 4.8% 3. Broadcom 7.8% 8. Analog Devices 4.6% 4. Qualcomm 5.3% 9. Applied Materials 4.6% 5. ASML 4.9% 10. KLA 4.3% Data source: VanEck Semiconductor ETF. As you can see, the ETF is highly concentrated in Nvidia, TSMC, and Broadcom stocks, which make up nearly 40% of the fund. All three of those stocks have performed well in recent years and are considered leaders in the AI boom. They have also driven the fund's recent outperformance, which has come from the AI leadership of those three stocks. The SMH's track record speaks for itself as few stocks, let alone ETFs, have jumped by 600% over the last decade. However, past performance does not guarantee future returns in the stock market. Still, the VanEck Semiconductor ETF looks well-positioned to keep outperforming the stock market. Its top stocks are still growing rapidly, and the fund trades at a relatively modest price-to-earnings ratio of 32, compared to the S&P 500 at 24.5. That does represent a premium to the broad market, but it seems deserved based on the growth rates of its top three holdings. The average revenue growth rate of these three stocks is about 50%, which is much faster than the overall market, and TSMC's revenue growth rate even accelerated in its most recent quarter, showing that the AI boom driving these stocks is far from over. Over the longer term, the need for semiconductors should only continue to grow, driven by AI and future technologies that the market isn't yet pricing in. Meanwhile, the top chip stocks have all built formidable competitive advantages, which should help them continue to outperform the broad market. While the coming months are likely to remain volatile, the VanEck Semiconductor ETF should continue to deliver strong growth over the long term thanks to the strength of its top holdings and increasing demand for semiconductors. That should provide an outsized return for your $250 investment. Before you buy stock in VanEck ETF Trust - VanEck Semiconductor ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and VanEck ETF Trust - VanEck Semiconductor ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $594,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $680,390!* Now, it's worth noting Stock Advisor's total average return is 872% — a market-crushing outperformance compared to 160% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 28, 2025 Jeremy Bowman has positions in ASML, Advanced Micro Devices, Broadcom, Nvidia, Taiwan Semiconductor Manufacturing, and VanEck ETF Trust-VanEck Semiconductor ETF. The Motley Fool has positions in and recommends ASML, Advanced Micro Devices, Applied Materials, Nvidia, Qualcomm, Taiwan Semiconductor Manufacturing, Texas Instruments, and iShares Trust-iShares Semiconductor ETF. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy. The Best Tech ETF to Invest $250 in Right Now was originally published by The Motley Fool
Yahoo
27-01-2025
- Business
- Yahoo
The Best Tech ETF to Buy With $2,000 Right Now
$2,000 might not sound like a lot to invest. But even in an exchange-traded fund (ETF), $2,000 could grow by 5x, 10x, or even more over time. That could make a difference to your financial future, and a great place to put that money is in tech stocks. Tech stocks have dominated the market narrative over the last couple of years, fueling the bull market and the AI boom. Investors have a lot of options when it comes to tech ETFs. The most popular is generally considered to be the Invesco QQQ ETF (NASDAQ: QQQ). This ETF tracks the Nasdaq-100, and has historically outperformed the S&P 500. However, there's another ETF that I think is a better buy for 2025. I'm talking about the VanEck Semiconductor ETF (NASDAQ: SMH). The VanEck Semiconductor ETF is the largest semiconductor ETF in the U.S., with $23 billion in assets under management. That makes it larger than the iShares Semiconductor ETF (NASDAQ: SOXX), which tracks the PHLX Semiconductor Index, which some investors see as the best way to track the semiconductor industry. The VanEck Semiconductor ETF has also historically outperformed SOXX. As the chart below shows, it has not only beaten SOXX, but also QQQ and the S&P 500. As you can see, the VanEck Semiconductor ETF has jumped nearly 10 times in the last decade. For several years, it traded in tandem with SOXX, but recently it's separated as its holdings are different from its rival ETF. It's more heavily weighted toward Nvidia, for example. The VanEck Semiconductor ETF's top three holdings are Nvidia, Taiwan Semiconductor Manufacturing Company, and Broadcom, which make up more than 40% of the ETF combined. Nvidia needs little introduction at this point. More than any other company, Nvidia deserves credit for sparking the generative AI boom. While OpenAI's launch of ChatGPT was a watershed moment, the components that made that product possible belong to Nvidia. These days, Nvidia is still the clear leader in the industry, with an estimated market share of 95% in data center GPUs. Nvidia reported revenue growth of 94% in its third-quarter report, showing that demand for its product continues to soar. It makes up 20% of the VanEck Semiconductor ETF. TSMC dominates the contract chip manufacturing industry. It makes more than half of the third-party chips in the world, and roughly 90% of advanced chips. In benefiting from the AI boom and the broader recovery in the semiconductor industry, TSMC has also delivered impressive results. Revenue is up 37% to $26.9 billion, and earnings per share have jumped 56% to $2.24. It represents 13% of the VanEck Semiconductor ETF. Finally, Broadcom has taken longer to emerge as an AI winner, but its most recent results showed demand is climbing. The diversified chip stock, best known for its networking components and switches, said in its most recent earnings report that AI revenue jumped 220% to $12.2 billion, driven by its AI XPUs and Ethernet networking components. 10% of the VanEck Semiconductor ETF is invested in Broadcom. A chip stock portfolio led by those three stocks and other sector leaders like ASML is well-positioned to outperform the market. In addition to its holdings, which offer a balanced approach to AI and the chip sector, the ETF also looks like a good value for its growth prospects. The fund currently trades at a price-to-earnings ratio of 38, which compares to the Invesco QQQ Trust at 35 and the SPDR S&P 500 ETF at 28. With the better growth prospects for SMH, it's worth paying up for the chip ETF. However, the best reason to buy the VanEck Semiconductor ETF is because it's the most direct way to get exposure to the AI boom, and 2025 looks poised to be another strong year for the industry. President Trump just announced private-sector investments of at least $100 billion in AI data centers, and valuations for start-ups like OpenAI and Anthropic are soaring. The VanEck Semiconductor ETF has historically crushed the S&P 500 for a reason, and it's a good bet to continue outperforming the market in the coming years. Before you buy stock in VanEck ETF Trust - VanEck Semiconductor ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and VanEck ETF Trust - VanEck Semiconductor ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $874,051!* Now, it's worth noting Stock Advisor's total average return is 937% — a market-crushing outperformance compared to 178% for the S&P 500. Don't miss out on the latest top 10 list. Learn more » *Stock Advisor returns as of January 21, 2025 Jeremy Bowman has positions in Broadcom, Nvidia, Taiwan Semiconductor Manufacturing, and VanEck ETF Trust-VanEck Semiconductor ETF. The Motley Fool has positions in and recommends Nvidia, Taiwan Semiconductor Manufacturing, and iShares Trust-iShares Semiconductor ETF. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy. The Best Tech ETF to Buy With $2,000 Right Now was originally published by The Motley Fool
