Shares of ASML Holding NV (NASDAQ:ASML) have gained 5.4% to $717.41 since Monday’s open as the U.S. unveiled new export controls targeting China's semiconductor sector.
These measures, restricting advanced chipmaking tools and AI-related technologies, could realign global supply chains, bolstering ASML's critical role in chip production.
ASML also said on Monday that the company does not expect the latest semiconductor sanctions on China to affect its business in 2024.
What To Know: Based in the Netherlands, ASML is the exclusive supplier of extreme ultraviolet (EUV) lithography systems, the most advanced equipment for manufacturing cutting-edge semiconductors used in applications such as artificial intelligence, high-performance computing and 5G.
The company also dominates in deep ultraviolet (DUV) lithography systems, crucial for producing mature and mid-range chips. As the only firm capable of delivering EUV machines, ASML remains a linchpin for chipmakers like Taiwan Semiconductor Manufacturing Co., Intel and Samsung Electronics.
The new sanctions block exports to 140 Chinese entities and broaden the foreign direct product rule, curbing access to critical manufacturing tools. However, agreements between the U.S., the Netherlands, and Japan exempt ASML from significant disruptions, reinforcing its strategic advantage in supplying allied nations.
With China unable to access the most advanced lithography systems, demand for ASML's equipment among non-Chinese manufacturers is expected to grow, especially as the U.S. and its allies ramp up domestic chipmaking capacities.
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Investors can gain exposure to ASML by investing in the Invesco QQQ Trust, Series 1 (NASDAQ:ASML) and the VanEck Semiconductor ETF (NASDAQ:SMH).
Is ASML A Good Stock To Buy?
An investor can make a few decisions when deciding whether a stock is a good buy. In addition to valuation metrics and price action which you can find on Benzinga's quote pages – like ASML Holding‘s page for example – there are factors like whether or not a company pays a dividend or buys a large portion of its stock each quarter.
These are known as capital allocation programs. ASML Holding does pay a dividend, which yields 0.85% per year as of the closing price on Dec. 3, 2024. Feel free to search Benzinga's dividend calendar for the next company that is due to pay a dividend and determine what kind of yield you can earn for holding a share of the company.
For example, if you're looking to earn an annualized return of 13.81%, you'll need to buy a share of PIMCO Dynamic Income by the Dec. 12, 2024. Once done, you can expect to receive a nominal payout of $0.22 on Jan. 2, 2025.
Buyback programs are obviously different and highly variable. A company can approve a buyback program and purchase shares as it sees fit over the course of time in which the buyback was authorized. Looking through the latest news on ASML Holding will often yield whether or not the company has approved a buyback program recently. Buyback programs usually serve as a support for share prices, serving as a backstop for demand.
According to data from Benzinga Pro, ASML has a 52-week high of $1,110.09 and a 52-week low of $645.45.
