Could this chipmaker be worth $500 billion next year?

October 12, 2021 20:05

While most growth investors look towards the FAANG stocks in the US, a lesser-known Dutch company is all the talk in the institutional world. ASML – Europe's largest tech company – is considered the linchpin of the world’s semiconductor industry. The company is the only one in the world that offers extreme ultraviolet lithography (EUV) machines.  

The world’s largest chipmaker, the Taiwan Semiconductor Manufacturing Company (TSMC) which provides 90% of the world’s chips, uses these machines from ASML to create its smallest and most advanced chips.  

Over the past year, the pandemic caused a global chip shortage sending chip maker stocks soaring higher. According to some analysts interview by CNBC, ASML’s current market cap of around $300 billion could surge higher to $500 billion next year.  

Source: Admirals MetaTrader 5, #ASML, Monthly - Data range: from 1 Sep 2013 to 12 Oct 2021, performed on 12 Oct 2021 at 8:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.  

Even ASML is expecting a sales boom in the next ten years with annual revenues of 24 – 30 billion euros by 2025, up from 15 – 24 billion euros previously forecasted. 

The long-term trend of ASML’s share price can be seen in the monthly price chart above. While the stock price has exhibited some significant growth over the past decade, the recent dip has some investors excited with long-term targets around the 1,000 euro per share price level.  

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Source: Premium Analytics, 12 October 2021

Performing a quick search on ASML’s share price using the Techincal Insight Lookup indicator shows 16 technical events taking place on the stock. These are split into short term, intermediate-term and long term.  

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Jitanchandra Solanki
Jitanchandra Solanki Financial Markets Author, Admirals London

Jitanchandra is a financial markets author with more than 15 years experience trading currencies, indices and US equities. He is an accredited Market Technician with a BA Hons degree.