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Why ASML Stock Popped Today
ASML is positioned to continue powering the Magnificent Seven, and one investment firm just had a significant change of heart on the stock.
Shares of industry-leading lithography specialist, ASML (ASML +5.39%), are up 9% as of noon Friday. The catalyst for this surge stems from Aletheia Capital issuing a rare stock rating reversal from "sell" to "buy," alongside a doubling of its price target for the stock from $750 to $1,500. Compared to ASML's current trading level, this new price target represents 30% upside.
ASML holds a dominant share of the deep ultraviolet (DUV) lithography industry and a quasi-monopoly in the bleeding-edge extreme ultraviolet (EUV) lithography niche, making it one of the most important companies in the world today — particularly in the semiconductor chain. Lithography is the near-magic process of etching infinitesimal patterns onto silicon wafers to be used in the world's most advanced semiconductor chips — and ASML's equipment leads the way.
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Could This Equipment Maker Be the Hidden Winner of the AI Buildout?
No one comes close to ASML's lead in AI semiconductor manufacturing equipment.
The Dutch company's technology is likely a decade ahead of that of its competitors.
What's more, ASML's shares look inexpensive compared to the broader tech sector.
There are plenty of flashy artificial intelligence (AI) companies for investors to choose from right now, and some could end up being great long-term investments. However, one angle in the AI boom that often gets overlooked is that there is a lot of complex manufacturing equipment that makes it all possible.
One company that dominates this space is ASML Holding (NASDAQ: ASML), which manufactures the equipment for semiconductor production. ASML is already benefiting from the rising demand for artificial intelligence processors, and could continue to be the winner as the AI buildout occurs.
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