ASML Valuation Hits Decade Low vs. US Peers

ASML Holding NV's valuation relative to its US-listed peers has reached a ten-year low, indicating that the Dutch chip-equipment maker's recent rally may continue. Europe's largest technology stock is now priced at approximately 37 times earnings for the next 12 months, a mere 17% premium over Applied Materials Inc., the smallest it has commanded since 2014.

Furthermore, the Amsterdam-listed firm trades at a 5% discount to Lam Research Corp., a situation not observed in 14 years. This comes as ASML remains the exclusive global supplier of extreme ultraviolet lithography machines, essential for advanced semiconductor manufacturing. While its shares have surged 36% year-to-date on optimism surrounding AI-driven data center demand, its US counterparts, Applied Materials and Lam Research, have seen gains exceeding 50% over the same period.

JPMorgan analyst Sandeep Deshpande noted this shrinking valuation premium, stating that ASML, despite its monopoly, now trades in-line with its US peers, which he believes suggests the company is mis-priced. Although ASML recently raised its sales guidance for the year, its stock experienced a decline as traders cited elevated expectations and crowded positioning. As of Thursday, the shares were up 2.0% in Amsterdam.