ASML Just Delivered Excellent News for Micron Stock Investors

ASML reported impressive third-quarter earnings that should provide reassurance to investors concerned about the potential slowdown in the AI boom. Revenue increased by 55% to 11.66 billion euros, slightly below estimates. Earnings per share soared to 12.93 euros, significantly surpassing the consensus of 10.76 euros. The company raised its full-year guidance, projecting revenue between 44 billion and 45 billion euros.

ASML's CEO, Christophe Fouquet, stated that customers are increasing their short- and medium-term equipment demand forecasts due to confidence in AI-related investments. The company expects demand to continue well into the future, with customers expressing interest in placing orders for 2029 and 2030. ASML's backlog is strong and growing, indicating that the semiconductor industry's bottleneck will persist for several more years due to the crucial role of lithography machines in expanding chip manufacturing capacity.

Micron, a key customer of ASML, stands to benefit from the memory chip shortage, as the demand for high-bandwidth memory like HBM4, exclusively on EUV, will be limited by the availability of ASML machines. While chip stocks have faced pressure this week due to concerns over rising interest rates, AI build-out, and South Korean market weakness, the companies at the top of ASML's customer list are well-funded and capable of purchasing the equipment, regardless of economic factors.

The AI sector is likely to remain supply-constrained for the next few years, indicating that AI growth would be even more rapid without such constraints and that memory chip shortages will keep prices elevated. Micron and ASML are well-positioned for growth in the coming years, and this positive outlook should eventually translate into increased stock prices.