ASML: buy when there is blood on the streets

Dutch chip equipement maker, ASML gave weak guidance for rest of 2024 and into 2025 this week. Its customers are slowing purchase of machines after record purchases in previous quarters. This is because customers are assessing their (neely installed) production capacities against demand.

Market reacted savagely. The stock which was trading at 795 € on 15th Oct fell to 626 € as of 17th Oct.

Despite the bloodbath, the fundamentals of ASML remains strong. Its lithography technology is most sought after in producing cutting edge chips. AI revolution is still in its fancy and demand for chips will continue to boom in this decade. It is only a matter of few months before customers return back in droves to order ASML's machine tk clear their production backlogs.

Meanwhile, for a patient investor this precipitous drop represents an excellent buying opportunity. To own a piece of a very strong company at a bargain price.