Billionaire Ray Dalio is Shorting These 5 European Stocks

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

ASML Holding N.V. (NASDAQ:ASML) is a Dutch semiconductor chip manufacturer that is expected to come under immense pressure due to a looming recession.

The semiconductor industry has observed shortages in recent times due to ramped-up demand from various industries like consumer electronics, cryptocurrency mining, and electric vehicles. However, during a recession, the demand for consumer electronics and automobiles’ plummets significantly. This could dent the aggressive outlook of ASML Holding N.V. (NASDAQ:ASML). The production facilities of ASML Holding N.V. (NASDAQ:ASML) are spread across the Netherlands, and the company caters to European customers mainly. This makes the company highly exposed to any negative development related to Europe. Although ASML Holding N.V. (NASDAQ:ASML) is a market leader in deep ultraviolet (DUV) and extreme ultraviolet (EUV) systems, it faces numerous challenges related to raw materials and supply chain disruptions.

Here’s what ClearBridge Investments said about ASML Holding N.V. (NASDAQ:ASML) in its Q1 2022 investor letter:

“During the quarter, we reduced our semiconductor exposure through the trim of ASML (NASDAQ:ASML) to manage concerns of a slowdown due to the risk of double ordering and potential softness in some consumer end markets. We increased our position in IT services with the purchase of Accenture as we remain optimistic about the long-term growth potential these companies provide, which is underpinned by the compressed digital transformation cycle, rising cloud adoption and growth in data-driven insights.

Despite the market volatility and hyper-focus on rising rates, chief information officer surveys continue to forecast resilience in IT budgets this year. Growth in IT spending for 2022 is expected to remain above the 10-year pre-COVID-19 average, according to Morgan Stanley. We believe this is a result of the strong secular underpinnings brought on by digital transformation and businesses focusing on increasing efficiencies through technology.”

Out of the 912 hedge funds in Insider Monkey’s database, 46 funds held a stake in ASML Holding N.V. (NASDAQ:ASML) as of Q1 2022.