ASML Stock Is Hot, But Please Don’t Go Too Overweight On Chip Stocks

• ASML Holdings is a global leader in advanced semiconductor manufacturing systems, recently reaching an all-time high of $1,743.27.

• ASML demonstrates robust technical momentum.

• Shares are up 133% over the past 52 weeks.

• Despite strong performance, some analysts consider ASML overvalued and suggest diversification via ETFs like the iShares Semiconductor ETF (SOXX).

Today’s Featured Stock

Valued at $671 billion, ASML Holdings (ASML) is a world leader in manufacturing advanced technology systems for the semiconductor industry. The company offers an integrated portfolio for manufacturing complex integrated circuits. ASML designs, develops, integrates, markets, and services advanced systems. Its customers are major semiconductor manufacturers that create the chips that power a wide array of electronic, communications, and information technology products. 

What I’m Watching

I found today’s Chart of the Day by using Barchart’s powerful screening functions to sort for stocks with the highest technical buy signals; superior current momentum in both strength and direction; and a Trend Seeker “buy” signal. I then used Barchart’s Flipcharts feature to review the charts for consistent price appreciation. ASML checks those boxes. The Trend Seeker issued a new “Buy” signal on April 10. Since then, the stock has gained 14.37%.

Barchart Technical Indicators for ASML Holdings

Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.

ASML scored an all-time high of $1,743.28 on June 3.

• ASML has a Weighted Alpha of +138.08.

• It has a 100% “Buy” opinion from Barchart.

• The stock has gained 133.39% over the past 52 weeks.

• ASML has its Trend Seeker “Buy” signal intact.

• The stock recently traded at $1,730.19 with a 50-day moving average of $1,482.43.

• ASML has made 10 new highs and gained 25.06% over the past month.

• Relative Strength Index (RSI) is at 68.34.

• There’s a technical support level around $1,696.48.

Don’t Forget the Fundamentals

• $671 billion market capitalization.

• 61.17x trailing price-earnings ratio.

• 0.74% dividend yield.

• Analysts project revenue to grow 19.52% this year and another 21.50% next year.

• Earnings are estimated to increase 27.36% this year and an additional 30.57% next year.

Analyst and Investor Sentiment on ASML

• The Wall Street analysts followed by Barchart give the stock 22 “Strong Buy,” 2 “Moderate Buy,” and 4“Hold” opinions with price targets between $1,150 and $2,019. This is a very wide range.

• Value Line rates the stock “Above Average” and has price targets between $1,670 and $2,520.

• CFRA’s MarketScope rates the stock a “Strong Buy” with a price target of $1,846.

• Morningstar thinks the stock is 21% overvalued with a price target of $1,400.

• 134,050 investors are following the stock on Seeking Alpha, which rates it a “Hold.”

• Short interest is 0.25% of the float with 1.00 days to cover the float. I won’t give that as a plus because ADRs are not often shorted.

The Bottom Line on ASML

Although I like Dutch stocks, ASML is not my favorite semiconductor pick. It is an above-average stock but so are most of its semiconductor peers. It might be tempting to have a portfolio that is over-weighted in semiconductor stocks but maybe you should follow Rob Isbitts’ lead and look at an ETF like the iShares Semiconductor ETF (SOXX) instead.