Latest news with #chipmakers
Yahoo
a day ago
- Business
- Yahoo
Why ASML is the Most Important Stock You've Never Owned
In the vast tech ecosystem, one under-the-radar titan powers the future of nearly every major chipmaker: ASML Holding (ASML). Far more than just a semiconductor equipment supplier, ASML is a technological gatekeeper, a geopolitical linchpin, and arguably one of the most overlooked long-term growth stories in public markets. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Despite ongoing concerns around industry cyclicality and China-related headwinds, ASML continues to solidify its dominance in a space where it faces virtually no actual competition. As 2026 draws nearer, investors may want to tune out the noise and focus on what's unfolding beneath the surface—a company poised to enter a fresh multi-year growth phase, fueled by its unmatched 'NA EUV' technology and a rising tide of national semiconductor reshoring efforts. I remain bullish on ASML, as the company is still in the early stages of commercializing its core offering. Let's begin with what might be the most open secret in tech: ASML has no true rivals when it comes to extreme ultraviolet (EUV) lithography. None. It is the sole manufacturer of these incredibly complex machines, which are essential for producing chips at the most advanced process nodes. Whether it's the cutting-edge processors powering AI data centers or flagship smartphones, chances are they were built using ASML's EUV technology. These machines don't come cheap. A single EUV scanner can cost upwards of $200 million, contains over 100,000 precision-engineered parts, and takes more than a year to assemble. Yet, chipmaking giants like TSMC (TSM), Intel (INTC), and Samsung (SSNLF) have no alternatives—they simply queue up and wait. That exclusivity has allowed ASML to build a massive moat, not through pricing power alone, but through an unmatched technological lead. Even deep-pocketed rivals like Nikon ($NINOY, $NINOF) and Canon (CAJPY) have exited the EUV race entirely. ASML doesn't just lead the market—it is the market. Concerns about export restrictions, particularly involving China, have surfaced in recent quarters. While it's true that China accounted for 29% of ASML's 2023 revenue, no EUV machines have ever been shipped there. The tighter Dutch export controls—largely encouraged by U.S. pressure—mainly apply to high-end DUV tools. Though valuable, these sales were never the cornerstone of ASML's long-term strategy. Instead, ASML is increasingly aligned with Western and Taiwanese industrial priorities, shifting its geopolitical exposure toward greater long-term stability. What was once viewed as a liability has now become a strategic recalibration—one that positions ASML to thrive at the intersection of technology leadership and national security imperatives. What remains undercounted and underestimated with ASML is how much their business behaves like a high-end service platform. With over 1,500 tools installed globally, ASML's installed base garners a steady stream of recurring revenues from a combination of long-term service contracts, field upgrades, and performance enhancements. In 2024, approximately 23% of total revenue was generated from these activities, and I anticipate that number to rise. This implies that ASML is no more a cyclical, lumpy machinery business, but rather a capital equipment company with platform-like economics. This means big upfront average selling prices with decades of sticky, high-margin service revenue to follow. That flywheel will only be stronger with High-NA systems in the field. Once ASML's tools are deployed in a manufacturing facility, they become mission-critical and highly profitable to service and maintain. The market appears to be pricing ASML as a cyclical capital expenditures name rather than a structural enabler of Moore's Law. Despite a monopoly-like economic structure, ASML currently trades at approximately 30x forward earnings, with a PEG of just under 1.5 and a free cash flow yield of around 3%. Therefore, the stock price is reasonable—and I'd say cheap—for a company with this kind of visibility, pricing power, and strategic relevance. The only thing investors need to make this investment work out is patience, perseverance, and a tolerance to withstand geopolitical risks. I understand that the markets are fraught with tension due to the China-U.S. relationship surrounding semiconductors, but I'm bullish on reconciliation soon and a peaceful path to coexistence. As such, I'm staying invested despite the current market trepidation. According to analysts, ASML has a consensus Strong Buy rating based on three Buys, zero Holds, and zero Sells. The average ASML stock price target is $905, implying a ~21% upside over the next 12 months. I'm more bullish and could easily see the stock trading at $1,100 as macro strength creates investor confidence. Easing tensions between China and the U.S. would signal to markets that it is safe to begin allocating capital fearlessly again in both the East and the West. ASML is a stealthy compounder with an unbreakable technology moat. While others sell grand visions, ASML builds the reality behind them. It's indispensable in the chipmaking ecosystem, boasting resilient economics and technology that's far ahead of the pack. By 2026, investors are poised to see substantial returns as high-NA EUV moves from pilot to full production, sovereign chip foundries ramp up in the U.S. and Europe, and service revenues continue to scale rapidly. ASML offers a powerful blend of secular growth and strategic tailwinds—yet the market still prices it at a discount, for now. If you haven't been paying attention, now is the time. This is the company that makes the entire chip world possible. Quiet, relentless, and precise, ASML leads the way behind the scenes. Disclaimer & DisclosureReport an Issue 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
Globe and Mail
4 days ago
- Business
- Globe and Mail
Stock Market News for Jun 4, 2025
U.S. stocks closed higher on Tuesday, driven by a chipmaker rally, as investors awaited more clarity on potential trade deals between the United States and its trading partners. All three major indexes ended in positive territory. How Did The Benchmarks Perform? The Dow Jones Industrial Average (DJI) rose 0.5% or 214.16 points, to end at 42,519.64 points. The S&P 500 gained 0.6% or 34.43 points to close at 5,970.37 points. Materials and tech stocks were the biggest gainers. The Materials Select Sector SPDR (XLB) gained 1%, while the Technology Select Sector SPDR (XLK) rose 1.5%. The Industrials Select Sector SPDR (XLI) added 0.8%. Eight of the 11 sectors of the benchmark index ended in positive territory. The tech-heavy Nasdaq jumped 0.8%, or 156.34 points, to finish at 19,398.96 points. The fear-gauge CBOE Volatility Index (VIX) was down 3.65% to 17.69. Advancers outnumbered decliners on the NYSE by a 2.32-to-1 ratio. On Nasdaq, a 2.07-to-1 ratio favored advancing issues. A total of 15.69 billion shares were traded on Tuesday, lower than the last 20-session average of 17.8 billion. Chips Stocks Rally, Investors Shrug off Trade Tensions Chip stocks rallied on Tuesday, led by NVIDIA Corporation ( NVDA ). Shares of the artificial intelligence darling ended 2.8% higher on Tuesday, surpassing Microsoft Corporation ( MSFT ) in market capitalization for the first time this year. Shares of other chipmakers like Micron Technology, Inc. ( MU ) and Broadcom Inc. ( AVGO ) also jumped 4.2% and 3.3%, respectively. NVIDIA has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Investors are also optimistic about the United States reaching more trade deals with partner nations. The White House said on Monday that President Donald Trump and Chinese President Xi Jinping will meet this week after Trump accused Beijing of violating a temporary trade agreement. The Trump administration also wants other countries to come up with their best offers by Wednesday so that trade negotiations and accelerate before the temporary 90-day pause comes to an end. Meanwhile, the Organization for Economic Co-operation and Development cut its U.S. growth outlook to 1.6% this year from the earlier forecast of 2.2%. Tariff uncertainty was the key reason cited by the OECD to cut the forecast. Economic Data In the first major jobs report set released this week, the Labor Department's Job Openings and Labor Turnover Survey, or JOLTS report, showed job openings increased in April. The report showed that 1.03 job openings for every unemployed person. Job openings rose 191,000 to 7.391 million in April, slightly up from March. However, layoffs hit a nine-month high in April. Layoffs rose 196,000, the largest since July, but still a low of 1.786 million. In other economic data, factory orders declined 3.7% in April after an unrevised 3.4% jump in March, the Commerce Department reported. However, factory orders increased 2% year over year in April. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. Today, See These 5 Potential Home Runs >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT): Free Stock Analysis Report Micron Technology, Inc. (MU): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis Report
Globe and Mail
5 days ago
- Business
- Globe and Mail
Stocks Finish Higher on Chip Stock Strength and Healthy US Labor Market
The S&P 500 Index ($SPX) (SPY) Tuesday closed up +0.58%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.51%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.79%. June E-mini S&P futures (ESM25) are up +0.58%, and June E-mini Nasdaq futures (NQM25) are up +0.81%. Stock indexes on Tuesday shook off early losses and rallied, with the S&P 500 posting a 3-month high, the Dow Jones Industrials posting a 2-week high, and the Nasdaq 100 posting a 3-1/4 month high. Strength in chip makers on Tuesday boosted technology stocks and supported gains in the broader market. Stocks extended their gains on signs of a healthy US labor market after the Apr JOLTS job openings report showed an unexpected increase in job listings. The upside in stocks was muted Tuesday after the OECD cut its 2025 global GDP forecast for the second time this year, citing trade barriers and uncertainty that are weighing on economic confidence. Also, the steeper-than-expected decline in US April factory orders was bearish for equity prices. In addition, the heightened trade tensions between the US and China continue to weigh on stock prices following China's Ministry of Commerce's accusation on Monday that the US had unilaterally introduced new discriminatory restrictions. US Apr factory orders fell -3.7% m/m, weaker than expectations of -3.2% m/m and the biggest decline in 15 months. US Apr JOLTS job openings unexpectedly rose +191,000 to 7.391 million, showing a stronger labor market than expectations of a decline to 7.100 million. Comments on Tuesday from Atlanta Fed President Bostic were slightly hawkish and negative for stocks and bonds when he said he's in no rush to cut interest rates as 'there's still a way to go in terms of progress on inflation.' The Organization for Economic Cooperation and Development (OECD) cut its global 2025 GDP forecast to +2.9% from a March forecast of +3.1%, citing the impact of tariffs and uncertainty on confidence and investment. Weakness in Chinese manufacturing activity is negative for global growth prospects. The China May Caixin manufacturing PMI unexpectedly fell -2.1 to 48.3, weaker than expectations of an increase to 50.7 and the lowest level in more than 2-1/2 years. The markets are discounting the chances at 1% for a -25 bp rate cut at the next FOMC meeting on June 17-18. The markets this week will focus on any new trade or tariff news. On Wednesday, the May ADP employment change is expected to climb by +110,000, and the May ISM services index is expected to rise +0.5 to 52.1. On Thursday, weekly initial unemployment claims are expected to fall by -5,000 to 235,000. On Friday, May nonfarm payrolls are expected to climb +125,000, and the May unemployment rate is expected to remain unchanged at 4.2%. Finally, May average hourly earnings are expected to rise +0.3% m/m and +3.7% y/y. Overseas stock markets on Tuesday settled mixed. The Euro Stoxx 50 closed up +0.38%. China's Shanghai Composite closed up +0.43%. Japan's Nikkei Stock 225 closed down -0.06%. Interest Rates September 10-year T-notes (ZNU2 5) Tuesday close down -0.5 of a tick. The 10-year T-note yield rose +1.8 bp to 4.458%. Sep T-notes on Tuesday gave up early gains and turned lower after the US Apr JOLTS job openings unexpectedly rose, a hawkish factor for Fed policy. Also, hawkish comments from Atlanta Fed President Bostic weighed on T-notes when he said he's in no rush to cut interest rates. In addition, Tuesday's rally in the S&P 500 to a 3-month high reduced safe-haven demand for T-notes. T-notes on Tuesday initially moved higher on positive carryover from a rally in European government bonds due to an ECB-friendly Eurozone May CPI report. Also, Tuesday's action by the OECD to cut its global 2025 GDP forecast for the second time this year was supportive of T-notes. In addition, the slide in US Apr factory orders by the most in 15 months was supportive for T-notes. European government bond yields on Tuesday were mixed. The 10-year German bund yield rebounded from a 3-1/2 week low of 2.485% and finished up +0.1 bp to 2.525%. The 10-year UK gilt yield dropped to a 3-week low of 4.601% and finished down -2.9 bp to 4.638%. Eurozone May CPI eased to +1.9% y/y from +2.2% y/y in Apr, better than expectations of +2.0% y/y and the smallest increase in 8 months. May core CPI eased to +2.3% y/y from +2.7% y/y in Apr, better than expectations of +2.4% y/y and the smallest increase in 3-1/3 years. The Eurozone Apr unemployment rate fell -0.1 and matched the record low of 6.2%, right on expectations. Swaps are discounting the chances at 97% for a -25 bp rate cut by the ECB at Thursday's policy meeting. US Stock Movers Strength in chip stocks supported gains in the broader market. ON Semiconductor Corp (ON) closed up more than +11% to lead gainers in the Nasdaq 100. Also, Microchip Technology (MCHP) closed up more than +6%, and Micron Technology (MU) closed up more than +4%. In addition, NXP Semiconductors NV (NXPI) and Broadcom (AVGO) closed up more than +3%, and Nvidia (NVDA) closed up more than +2% to lead gainers in the Dow Jones Industrials. Finally, Advanced Micro Devices (AMD), Applied Materials (AMAT), GlobalFoundries (GFS), ARM Holdings Plc (ARM), and Texas Instruments (TXN) closed up more than +2%. Dollar General (DG) closed up more than +15% to lead gainers in the S&P 500 after reporting Q1 net sales of $10.44 billion, stronger than the consensus of $10.28 billion, and raising its 2026 net sales forecast to +3.7% to +4.7% from a previous view of +3.4% to +4.4%. MoonLake Immunotherapeutics (MLTX) closed up more than +18% after the Financial Times reported that Merck held talks to acquire the company. Ferguson Enterprises (FERG) closed up more than +17% after reporting Q3 revenue of $7.62 billion, above the consensus of $7.41 billion. Signet Jewelers (SIG) closed up more than +12% after reporting Q1 sales of $1.54 billion, above the consensus of $1.52 billion, and raising its 2026 adjusted EPS forecast to $7.70-$9.38 from a previous forecast of $7.31-$9.10, the midpoint above the consensus of $8.39. Pinterest (PINS) closed up more than +3% after JPMorgan Chase upgraded the stock to overweight from neutral with a price target of $40. Lululemon Athletica (LULU) closed up more than +3%6after Evercore ISI raised its price target on the stock to $400 from $320. Real Estate Investment Trust companies (REITs) retreated Tuesday. Mid-America Apartment Communities (MAA) closed down more than -2%. Also, Welltower (WELL), Healthpeak Properties (DOC), AvalonBay Communities (AVB), Equity Residential (EQR), and Essex Property Trust (ESS) closed down more than -1%. Kenvue (KVUE) closed down more than -5% to lead losers in the S&P 500 after CEO Mongon warned that seasonal demand is behind last year and the company's expectations. EchoStar (SATS) closed down more than -11% after deciding not to make a $183 million cash interest payment due June 2 in light of uncertainty raised by an FCC review. Earnings Reports (6/4/2025) Dollar Tree Inc (DLTR), Five Below Inc (FIVE), MongoDB Inc (MDB), PVH Corp (PVH), Thor Industries Inc (THO).
Yahoo
7 days ago
- Business
- Yahoo
Prediction: Nvidia Stock Will Soar in 2025 (and It's Due to This 1 Number)
Nvidia stock has surged in recent years as the company led the artificial intelligence boom. Moving forward, one particular element in Nvidia's earnings reports should impress long-term investors. 10 stocks we like better than Nvidia › Nvidia (NASDAQ: NVDA) has already delivered spectacular gains for investors, advancing more than 1,400% over the past five years. This is thanks to the company's dominant position in the artificial intelligence (AI) revolution and the resulting explosion in earnings growth. Quarter after quarter, Nvidia's revenue has advanced in the double or triple digits and reached record levels. In recent times, though, against a backdrop of import tariff uncertainties and restrictions on AI chip exports to China, investors have worried about growth ahead, which has weighed on Nvidia's stock, bringing it down 29% from the start of the year to its lowest point in April. Today, along with the rest of the market, Nvidia has rebounded from those lows. This comes amid optimism that the tariff picture won't be as dark as originally expected and as tech customers continue to spend big on Nvidia's products and services. Now, my prediction is that Nvidia's positive momentum may not be over, and the stock will soar in 2025 thanks to one particular number. Let's explore this further. So, first, a quick look at why Nvidia shares have skyrocketed over the past several years. The company is known for its graphics processing units (GPUs), high-powered chips with the ability to handle many tasks simultaneously. They primarily served the gaming market many years ago, but then Nvidia recognized their broad potential and expanded their use into other areas -- and AI stood out as a market where GPUs could shine. In fact, GPUs are central to the most important AI tasks, such as the training and inference of large language models (LLMs), so these models can then go on to do their job of solving complex problems. Nvidia also built out an entire ecosystem of supporting products and services, and all of this has resulted in mind-boggling growth. In the recent fiscal year, revenue soared 114% to $130 billion. This continued into the recent quarter, and the earnings numbers have proven that Nvidia's customers continue to pour investments into the company's products. Revenue advanced 69% to $44 billion during the period, and Nvidia noted a significant increase in demand for inference -- the "thinking" process LLMs go through to tackle questions and problems. Reports from Nvidia customers, such as Meta Platforms and Alphabet, support this positive earnings trend we saw in Nvidia's fiscal 2026 first quarter. These players have said in recent times that AI remains a priority, and they will continue to invest significantly in it -- Meta even increased its capital spending forecast for the year. All of this supports the idea of Nvidia's stock market gains this year. But one number in particular should encourage investors to get in on Nvidia -- and it could help the stock soar in the months ahead. This is a number that reflects the company's high profitability on sales. I'm talking about Nvidia's gross margin. The company has maintained a gross margin above 70% in recent quarters, with it even reaching into the mid-70% range. Earlier this year, Nvidia predicted that first-quarter gross margin would fall to the low-70% range amid the launch of its Blackwell architecture. (Launches involve extra costs, and the Blackwell rollout is particularly complex due to all its features and that it's customizable.) In the recent quarter, Nvidia met its goal, with gross margin settling at 71.3%, excluding the impact of a $1 billion charge related to chips meant for export to China. (If we include the impact of the charge, gross margin on a non-GAAP (non-generally accepted accounting process) basis was 61% and about 60% on a GAAP basis.) From here, Nvidia expects gross margins of 71.8% and 72% in the second quarter, on a GAAP and non-GAAP basis, respectively. The company says that Blackwell will drive continued progress, with forecasts of gross margin in the mid-70% range by later this year. So, Nvidia has delivered strong profitability and aims to continue doing so. Of course, the company still faces some headwinds, particularly U.S. restrictions on chip exports to China. If this situation worsens, it could put the brakes on stock performance, at least in the near term. It will be important to watch how this story plays out. But even with that challenge in mind, I remain optimistic, considering Nvidia's impressive profitability on sales over time. And the ongoing demand for its products and services should keep that momentum on track. That's why I predict that, thanks to Nvidia's solid level of profitability, the stock will soar in 2025. Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Nvidia 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 $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% 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 May 19, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy. Prediction: Nvidia Stock Will Soar in 2025 (and It's Due to This 1 Number) 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
BreakingNews.ie
29-05-2025
- Business
- BreakingNews.ie
Wall Street climbs after US court shoots down Trump's tariffs
Wall Street and financial markets around the world jumped after a US court ruled that President Donald Trump is not authorised to impose sweeping tariffs on imports under an emergency powers law. Futures for the S&P 500 rose 1% before the opening bell and futures for the Dow Jones Industrial Average were up 0.4%. Futures for the Nasdaq, home to Nvidia, other chipmakers and the biggest American technology companies, climbed 1.5%. Advertisement US Court of International Trade in New York found that the 1977 International Emergency Economic Powers Act, which Mr Trump has cited as his basis for ordering massive increases in import duties, does not authorise the use of tariffs. The White House immediately appealed and it was unclear if Mr Trump would abide by the ruling in the interim. The long-term outcome of legal disputes over tariffs remains uncertain. But investors appeared to take heart after the months of turmoil brought on by Mr Trump's trade war. Nvidia shares jumped 6% in off-hours trading after the chipmaker and artificial intelligence bellwether delivered another quarter of robust growth despite tariff-driven turbulence. Nvidia's share price shot up (AP Photo/Chiang Ying-ying, File) Heading into its earnings announcement on Wednesday, Nvidia's share price was right where it was at the beginning of 2025, before Mr Trump took office and started his tariff rollouts. Advertisement Nvidia's earnings, along with the court's tariff ruling, helped to propel other chipmakers and technology companies higher. Broadcom and Advanced Micro Devices each rose 3.1%, while Super Micro Computer jumped 4%. Apple and Amazon both rose about 2.5%. A three-judge panel ruled on several lawsuits arguing Mr Trump exceeded his authority, casting doubt on trade policies that have jolted global financial markets, frustrated trade partners and raised uncertainty over the outlook for inflation and the global economy. Many of Mr Trump's double-digit tariff hikes – including the huge levies on China – were already paused for up to 90 days to allow time for trade negotiations. But the uncertainty they cast over global commerce has stymied businesses and left consumers wary about what lies ahead. 'Just when traders thought they'd seen every twist in the tariff saga, the gavel dropped like a lightning bolt over the Pacific,' Stephen Innes of SPI Asset Management said. Advertisement Donald Trump's tariffs have been cast into doubt by a court ruling (AP Photo/Evan Vucci) The ruling was, at the least, 'a brief respite before the next thunderclap,' he said. In Europe at midday, Germany's DAX gained 0.4% and the CAC 40 in Paris jumped 0.8%. Britain's FTSE was unchanged. Japan's Nikkei 225 index jumped 1.9% to 38,432.98. American's largest ally in Asia has been appealing to Mr Trump to cancel the tariffs he has ordered on imports from Japan and to also stop 25% tariffs on steel, aluminum and autos. The ruling also initially pushed the dollar sharply higher against the Japanese yen, but it settled back down overnight. It was trading at 144.98 yen early on Thursday, up from 144.87 yen late on Wednesday. Advertisement Elsewhere in Asia, Hong Kong's Hang Seng added 1.3% to 23,561.86, while the Shanghai Composite index gained 0.7% to 3,363.45. Australia's S&P/ASX 200 gained 0.2% to 8,409.80. In South Korea, which like Japan relies heavily on exports to the US, the Kospi surged 1.9% to 2,720.64. Shares were also helped by the Bank of Korea's decision to cut its key interest rate to 2.5% from 2.75%, to ease pressure on the economy. Taiwan's Taiex edged 0.1% lower, and India's Sensex lost 0.2%. Advertisement The yield on the 10-year Treasury rose to 4.52% early on Thursday from 4.47% late on Wednesday. US benchmark crude oil gained 32 cents to 62.16 dollars per barrel. Brent crude, the international standard, added 26 cents to 64.58 dollars per barrel. The euro slipped to 1.1280 dollars from 1.1292 dollars.
