10 Hidden AI Stocks to Buy Now

4. ASML Holding NV (AMS:ASML)

Number of Hedge Fund Holders: 81

ASML Holding NV (AMS:ASML) is a leading supplier of lithography systems used in the semiconductor manufacturing process. It uses AI to optimize its system’s performance, improve yield, and accelerate the development of new chip technologies. These AI-powered solutions help chip manufacturers produce more advanced and efficient chips.

This company strongly benefits from the growth of Taiwan Semiconductor Manufacturing. TSMC’s 40% year-over-year revenue growth, driven by AI chip demand, has positively impacted ASML Holding NV’s (AMS:ASML) stock. This is because it’s a key supplier of lithography systems for TSMC.

CEO of ASML Holding NV (AMS:ASML), Peter Wennink, highlighted the strong growth in AI-related demand for both Logic and Memory chips. He also mentioned other secular growth drivers for the semiconductor industry, such as the energy transition, electrification, and AI.

In Q2 2024, it sold 89 new lithography machines and 11 used ones. The company recorded a total of $6.83 billion in revenue for this period. However, there was a year-over-year decline of 11.69%. But this decline was smaller than that of the year prior, which was 23.63%. The earnings per share were $4.39. The primary reason for the decline was the uncertainty surrounding potential US restrictions on chip equipment exports to China.

Its strong market position and focus on AI-driven solutions make it a promising investment for the long term. With the global semiconductor industry planning to invest over $2.3 trillion in infrastructure upgrades between 2024 and 2032, this company is well-positioned to capitalize on this growth.

By the end of this quarter, 81 hedge funds were long in the company, with the largest stake amounting to $3,226,042,315 by Fisher Asset Management.

Polen International Growth Strategy stated the following regarding ASML Holding N.V. (NASDAQ:ASML) in its fourth quarter 2023 investor letter:

“Netherlands-based ASML Holding N.V. (NASDAQ:ASML) and Japan-based Lasertec play dominant roles within different segments of the global semiconductor industry. In both cases, shares rallied significantly in the fourth quarter of 2023, prompting our positions to grow as a percentage of the overall portfolio. We believe both companies will see demand for their products as extreme ultraviolet (EUV) lithography and soon high-numerical aperture lithography must be utilized to manufacture the world’s smallest chips. However, in our estimation, 2024 could deliver a year of less exciting growth for the semiconductor industry, which prompted us to trim these positions back.”