10 Most Promising Future Stocks According to Analysts

3. ASML Holding N.V. (NASDAQ:ASML)

Number of Hedge Fund Holders as of Q2: 81

Analyst Upside as of October 10, 2024: 37.07%

ASML Holding N.V. (NASDAQ:ASML) is one of the most promising future stocks, according to analysts going by its growing prospects amid the artificial intelligence revolution. The company’s competitive edge stems from making the most sought-after lithography equipment used to manufacture semiconductors.

The company’s long-term prospects and growth metrics remain intact, according to analysts, as it makes the most advanced versions of the equipment that are in high demand for developing the most advanced component-dense chips.

Some of ASML Holding N.V. (NASDAQ:ASML)’s biggest customers include Taiwan Semiconductor Manufacturing, Intel, and Samsung, affirming a solid revenue base. With the company looking for ways to ramp up the production of advanced AI-powered chips, most are turning to ASML to supply the extreme ultraviolet lithography (EUV) machinery.

However, the company’s revenue growth isn’t dependent on selling more machines annually. It continues to make money by selling replacement parts and maintaining already-used machinery. As more machines are installed in the chipmakers’ foundries, the recurring revenue from servicing should increase.

Over the past 15 years, as foundries have increased their use of ASML Holding N.V. (NASDAQ:ASML)’s equipment while maintaining and modernizing their older equipment, the company’s installed base revenue has increased substantially faster than its system sales. Additionally, ASML’s machines have a 25–30-year lifespan, making them a reliable and expanding source of high-margin income.

ASML anticipates 2025 to be a significant year, with revenue expected to range between $33.17 billion and $44.2 billion, representing a 27% increase. The predicted growth should come even on the stock trading at a discount with a  price-to-earnings multiple of 26  while rewarding investors with a 0.79% dividend yield.

Likewise, analysts on Wall Street rate the stock as a Buy with an average price target of $1,1523, implying 37.07% upside potential from current levels. 81 hedge funds were long on ASML Holding N.V. (NASDAQ:ASML) at the end of Q2 2024. Of those, Fisher Asset Management was the largest shareholder with a position worth $3.23 billion.

Baird Chautauqua International and Global Growth Fund stated the following regarding ASML Holding N.V. (NASDAQ:ASML) in its Q3 2024 investor letter:

“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.”