We recently published a list of 10 AI News Investors Probably Missed. In this article, we are going to take a look at where ASML Holding N.V. (NASDAQ:ASML) stands against other AI news investors probably missed.
The world of AI is shifting fast, and DeepSeek is at the center of the latest shake-up. A small Chinese company with just 200 employees has built an AI model that rivals tech giants at a fraction of the cost. This breakthrough raises big questions about the future of AI: Will open-source models challenge the dominance of closed systems? Will companies still need massive data centers, or is AI becoming more efficient? And how will major tech firms respond? While the answers aren’t clear yet, one thing is, that AI is evolving, and the race is far from over.
DeepSeek Breakthrough and the Future of AI Development
Chief Investment Strategist and Portfolio Manager at Hightower, Stephanie Link joined CNBC Squawk Box to discuss the market downturn, especially in tech and energy, and the impact of DeepSeek on AI competition. She acknowledged concerns about the AI semiconductor sector but emphasized that the market is large enough for multiple players. While she questioned whether DeepSeek’s technology is truly superior, she suggested investors look for opportunities in companies like Amazon and Broadcom.
Andrew Ross Sorkin of CNBC raised points about the potential shift toward open-source AI, questioning whether this could commoditize AI technology and reduce the need for massive data centers. Link responded that while open-source models like DeepSeek may become widespread, there are still unresolved questions regarding security and long-term adoption by large companies. Despite this, she believes hyperscalers will continue to invest in AI, with billions earmarked for the sector. While Link sees the AI market continuing to grow, she emphasized the need for careful stock selection rather than jumping in immediately.
For this article, we selected AI stocks by reviewing news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A technician in a clean room working on a semiconductor device, illuminated by the machines.
ASML Holding N.V. (NASDAQ:ASML)
Number of Hedge Fund Holders: 64
ASML Holding N.V. (NASDAQ:ASML) designs, manufactures, and services advanced semiconductor equipment, including lithography, metrology, and inspection systems, serving global chipmakers.
On January 29, Bernstein analyst Sara Russo noted that ASML exceeded expectations for Q4 and 2024, driven by strong installed base services and better-than-expected costs for High-NA EUV system acceptance. Bookings stood out at €7.1 billion, far above the €3.5 billion consensus. Q4 revenue reached €9.3 billion, surpassing estimates, with a gross margin of 51.7% and EPS of €6.85. Memory sales remained stable, making up 39% of system sales and bookings.
For Q1 2025, ASML Holding (NASDAQ:ASML) guided sales at €7.75 billion and a 52.5% gross margin, while full-year guidance remains at €32.5 billion in sales and 52% gross margin. The company will stop reporting quarterly bookings, shifting to annual backlog updates. China’s system revenue share dropped to 27% in Q4, with full-year 2024 at 41%, expected to normalize to 20% in 2025. While results were strong, Bernstein remains cautious about AI-related demand uncertainties. Russo noted:
“While overall a solid set of results, and the strong bookings number should reassure investors about 2025, we believe there is still a lot to play out in AI demand as the DeepSeek impact becomes clearer. Longer-term, we remain bullish on the opportunity for $ASML, but caution may prevail until near-term implications are better understood.”
Overall, ASML ranks 3rd on our list of AI news investors probably missed. While we acknowledge the potential of ASML as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ASML but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
