10 Best Fundamental Stocks to Invest In

6) ASML Holding N.V. (NASDAQ:ASML)

10-Year Revenue Growth Rate: ~15.5%

10-Year Net Income Growth Rate: ~16.0%

Number of Hedge Fund Holdings: 81

ASML Holding N.V. (NASDAQ:ASML) is engaged in developing, producing, marketing, selling, and servicing advanced semiconductor equipment systems for chipmakers.

ASML Holding N.V. (NASDAQ:ASML)’s competitive advantages stem from its intangible assets, cost advantages, and switching costs. The company’s position as the leading provider of lithography tools for semiconductor manufacturing is expected to remain unchallenged.  ASML Holding N.V. (NASDAQ:ASML) forms an integral part of the production of advanced chips used in numerous applications, such as AI and high-performance computing.

The company’s continued investment in R&D is critical for maintaining its technological edge. It has been working on next-generation high-NA EUV systems, which should result in even greater precision in chip manufacturing. Wall Street expects that High Bandwidth Memory (HBM), which is a critical component in AI applications, should fuel strong demand for the company’s advanced lithography systems. This trend is expected to offset weaknesses in other market segments.

The surge in AI applications continues to drive increased demand for specialized chips, offering a significant opportunity for ASML Holding N.V. (NASDAQ:ASML). Notably, the AI chips need advanced manufacturing processes that rely significantly on the company’s EUV lithography systems.

As per Wall Street analysts, the shares of the company have an average price target of $917.67. Baird Asset Management controlled Chautauqua Capital Management, a boutique investment firm, released the Q3 2024 investor letter. Here is what the fund said:

“ASML Holding N.V. (NASDAQ:ASML): After a 35% price appreciation in 1H24 and a beat in 2Q24 numbers, investors are apprehensive about Intel capex cuts, potential memory weakness, and a less clear cyclical recovery pace in 3Q24 and potentially 2025. We remain positive on long-term demand for ASML’s products due to industry supply/demand factors for computing power.”