12 Stocks That Could Split in the Near Future

5. ASML Holding NV (NASDAQ:ASML)

Share Price as of January 19: $756.33

Surge in Share Price in 5 Years: 152.08%

Stock Split Confirmed: No

Number of Hedge Fund Holders: 64

ASML Holding NV (NASDAQ:ASML) provides advanced semiconductor equipment systems. The company specializes in cutting-edge technologies like extreme ultraviolet (EUV) and deep ultraviolet (DUV) lithography systems, as well as metrology tools to ensure chip quality.

The company maintains a near-monopoly status in EUV technology. This helps create tiny features on silicon chips required for advanced applications like AI, 5G, and high-performance computing. EUV machines are costly and often exceed $300 million per unit. In Q3 2024, ASML Holding NV (NASDAQ:ASML) made €5.9 billion in total revenue, with €2.1 billion of that coming from EUV sales.

However, the company faces challenges due to US export controls tied to the US-China rivalry. While it has historically sold its DUV lithography machines to China, the sale of its EUV machines remains restricted. In 2023, China accounted for 29% of ASML’s total sales, but this is projected to decrease to ~20% by 2025 due to the restrictions. Additionally, ASML Holding NV (NASDAQ:ASML) expects to ship fewer than 50 EUV tools globally in 2025, a decrease from earlier projections made in 2022.

The company remains relevant due to investments from the US government, especially under the CHIPS and Science Act. This allocates around $52 billion for semiconductor manufacturing and research in the US. In December 2024, BNP Paribas Exane began coverage of the company with an Outperform rating and €817 price target, citing its market dominance and a projected 6% revenue increase by 2030.

Impax Global Environmental Markets Fund believes that the concerns about ASML Holding NV’s (NASDAQ:ASML) stock price due to potential US export restrictions to China are overstated, given its market dominance in EUV lithography. This is what the firm said regarding the company in its Q3 2024 investor letter:

“ASML Holding N.V. (NASDAQ:ASML) (Efficient IT, Netherlands) similarly to other semiconductor production-equipment makers, the share price has been under pressure on speculation the US may impose additional restrictions on China’s access to semiconductors and equipment. In addition, Intel’s results raised investors’ concerns that ASML would be disproportionately affected by a cutback on capex at Intel, which is a significant customer. The investment team believes these concerns are largely overblown given ASML’s dominant position in extreme ultraviolet (EUV ) lithography for advanced chips, which is where current investment is focused.”