ASML hiked its sales forecast Wednesday. Second time this year. AI chip demand stays strong, apparently strong enough that the company had to admit it was wrong about being wrong the first time.
Retail traders saw the stock jump 3% and immediately began calculating how many shares they could've bought if they hadn't spent their account on SPY puts last month. The math is devastating. The regret is palpable. The Robinhood screenshots tell a story of men who thought they understood semiconductors because they owned a PlayStation.
ASML makes the machines that make the chips. Extremely expensive machines. The kind of capital equipment that costs more than every house on your block combined. Their customers keep expanding production capacity because everyone needs AI chips now. Apparently we're training models to do things we could already do ourselves, but slower and with more hallucinations. Progress.
The company raised guidance in January. Then raised it again now. This is what happens when your customers are in an arms race to see who can spend the most money on infrastructure for a technology that might be useful or might just be very elaborate autocorrect. ASML doesn't care. They sell the shovels. The gold rush could be fake and they still get paid.
Some guy named Trevor is reading this headline right now and thinking he should buy calls. Trevor will not buy calls. Trevor will spend fourteen hours researching ASML's lithography technology, watching YouTube videos about extreme ultraviolet light, and reading Dutch financial disclosures through Google Translate. Then Trevor will buy shares of NVIDIA instead because the ticket symbol is easier to remember. Then NVIDIA will drop 8% on a single analyst downgrade and Trevor will post on Reddit asking if he should average down.
ASML's customers are wrong twice a year in the same direction, which means ASML gets to be right twice a year by simply writing down bigger numbers than they wrote down before.
Photo by on Unsplash
Leave a Comment