12 Stocks to Buy That May Be Splitting Soon

5. ASML Holding (NASDAQ:ASML)

Share Price as of March 17: $661.70

Surge in Share Price in 5 Years: 207.81%

Stock Split Confirmed: No

Number of Hedge Fund Holders: 86

ASML Holding (NASDAQ:ASML) provides advanced lithography solutions for the semiconductor industry. It develops, manufactures, and services lithography, metrology, and inspection systems. This includes the critical extreme ultraviolet (EUV) technology, which is essential for producing cutting-edge integrated circuits.

On January 30, Argus analyst Jim Kelleher lowered the company’s price target to $1,000 from $1,250, while keeping a Buy rating. Despite the company’s record Q4 2024 revenue and earnings exceeding expectations, bookings fell 23% year-over-year. ASML Holding (NASDAQ:ASML) anticipates reduced China exposure in 2025 but expects increased demand in other major markets. EUV machines are critical for advanced chip manufacturing.

In 2024, EUV system sales reached €8.3 billion, which accounted for 44 systems, including High NA EUV. Q4 2024 alone saw €2.9 billion in EUV sales, with revenue recognized on two High NA systems. The NXE:3800E (Low NA EUV) also demonstrated strong performance. Market demand, particularly driven by AI, is fueling growth. Long-term, ASML Holding (NASDAQ:ASML) projects a 2030 revenue opportunity of €44 billion to €60 billion, with EUV systems playing a major role.

The company’s monopoly in critical lithography technology and the rising demand for advanced chips, especially for AI, position it for strong long-term growth. Baron Fifth Avenue Growth Fund stated the following regarding ASML Holding (NASDAQ:ASML) in its Q4 2024 investor letter:

“ASML Holding N.V. (NASDAQ:ASML) is a Dutch company that designs and manufactures photolithography equipment for semiconductor manufacturing. While ASML is the leader across all types of lithography, most importantly, it is the only manufacturer of extreme ultra-violet lithography tools, which are critical for the manufacturing of leading-edge chips. Shares fell 16.6% during the fourth quarter (finishing the year down 7.7%) on reduced guidance for 2025 as well as growing investor concerns about the potential impact of U.S. government restrictions on Chinese demand and the possibility of peaking lithography intensity. Despite near-term noise, we believe that the growing demand for chips in general and AI chips in particular will continue to support long-term growth for the wafer fab equipment industry with ASML’s competitive positioning remaining unassailable. While lithography as a percentage of capital expenditure may decrease from current levels, the chip layer count requiring lithography will continue to increase, in our view, as chips continue to become more complex. As a monopoly on critical lithography tools supporting an industry with growing demand fueled by the proliferation of AI, we see strong long-term upside for ASML.”