Generation Investment Management, an investment management firm, released its “Global Equity Strategy” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The firm is not a momentum investor and avoids companies with uncertain future earnings and high valuations. The firm invests for the long-term and remains curious about new companies. As of December 31, 2024, the Global Equity strategy had USD 25.7 billion in total assets under management. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Generation Global Equity Strategy emphasized stocks such as ASML Holding N.V. (NASDAQ:ASML). Headquartered in Veldhoven, the Netherlands, ASML Holding N.V. (NASDAQ:ASML) offers lithography solutions for the development and production of advanced semiconductor equipment systems. The one-month return of ASML Holding N.V. (NASDAQ:ASML) was -14.89%, and its shares lost 36.38% of their value over the last 52 weeks. On April 3, 2025, ASML Holding N.V. (NASDAQ:ASML) stock closed at $623.22 per share with a market capitalization of $261.587 billion.
Generation Global Equity Strategy stated the following regarding ASML Holding N.V. (NASDAQ:ASML) in its Q4 2024 investor letter:
“ASML Holding N.V. (NASDAQ:ASML), a Dutch company and a recent addition to our portfolio, is a critical enabler of the semiconductor industry. They provide advanced lithography equipment, which is essential for producing semiconductors. As demand for chips accelerates – driven by AI, electrification and broader applications across the economy – ASML stands to benefit significantly.
ASML operates in a near-monopolistic position in lithography machines, thanks to decades of engineering expertise and innovation. Over the past five years, the company has grown revenues at 20% annually. We expect the company’s revenue growth to moderate but continue to grow strongly, in line with the semiconductor industry. Margins are likely to expand over time, underscoring ASML’s high quality and earnings potential.
There are risks. Short-term volatility in orders, and geopolitical trade restrictions, could affect growth. Over the long term, disruptive innovation outside of lithography poses a challenge, though we believe ASML’s position is secure. We therefore find the valuation of the company attractive. We are confident in its ability to compound value over the coming years.”
A technician in a clean room working on a semiconductor device, illuminated by the machines.
ASML Holding N.V. (NASDAQ:ASML) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 86 hedge fund portfolios held ASML Holding N.V. (NASDAQ:ASML) at the end of the fourth quarter compared to 64 in the third quarter. While we acknowledge the potential of ASML Holding N.V. (NASDAQ: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 timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
We covered ASML Holding N.V. (NASDAQ:ASML) in another article, where we shared the list of best innovative stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.