To The Moon

$ASML Holding NV(ASML)$ $Taiwan Semiconductor Manufacturing(TSM)$ $Applied Materials(AMAT)$ 🎯⚙️🧠 $ASML: The Chokepoint of AI, Where the Next Decade Begins 🧠⚙️🎯

I’m not here to hype another chip name. I’m focused on the machine behind the machines. ASML isn’t just part of the AI revolution, it’s the choke point, controlling the tools every advanced chip needs to be born!

Earnings drop Wednesday, 17Jul25 BMO, in a week that could reshape tech sentiment. CPI hits Tuesday, PPI lands Wednesday, the Fed enters blackout Friday, and $NFLX and $TSMC headline earnings. I’m not chasing AI fluff, I’m positioning upstream.

📡 What ASML Actually Does

ASML builds the world’s most advanced lithography systems, enabling foundries to etch atomic-scale circuitry into silicon wafers. Their gear powers the leading edge of Moore’s Law.

Revenue breakdown:

• DUV systems (~45%)

• EUV systems (~29%)

• Services and upgrades (~26%), growing and increasingly defensive

Each line is under unique pressure this quarter, from capex digestion to policy headwinds.

📊 Q2 2025: What the Market Expects

Consensus from Bloomberg, Benzinga, Ainvest:

• Revenue: €7.5B (≈$8.6B), mid-range of guidance

• Net income: €2.04B

• EPS: €5.80 to €5.94 (vs €4.01 YoY)

• Gross margin: 50% to 53%, down from 54%, squeezed by higher R&D and supply chain inputs

This is a setup where hitting numbers isn’t enough. Execution must reinforce the High-NA story while margins prove resilient.

📈 Q1 2025 Recap: High Bar, High Stakes

Q1 was huge:

• Revenue: €7.74B (+46% YoY)

• Net profit: €2.355B (+92%)

• EPS: €6.00

• Orders: €3.94B, the lowest in two years

Strong EUV deliveries to $TSMC and Samsung drove the beat. But the orders miss raised red flags. Q2 must show whether this was just digestion or something deeper.

📦 Orders: My North Star This Quarter

I’m zeroed in on the order book:

• €4.5B+ marks a recovery threshold

• EUV vs DUV mix will shape forward sentiment

• Analysts split between inventory absorption and actual capex pullback

Jefferies downgraded ASML last week, citing expected wafer-fab capex declines in China, down 16% in 2025 and another 8% in 2026. That’s material.

📉 Geopolitics: Not Just Noise Anymore

The export vise keeps tightening:

• EUV and advanced DUV (Twinscan NXT:2000i) sales banned to China

• New: Service, repair, and spare part restrictions now enforced on existing machines

• This hits not just system revenue but also recurring high-margin services in Asia

CEO Peter Wennink summed it up:

“We are reconstructing a global supply chain model that has been in place for thirty years, a process that is both painful and necessary.”

Add to this, Dutch authorities just jailed a Russian agent for stealing ASML trade secrets. U.S. officials recently called EUV export restrictions the most critical semiconductor control in the world. These aren’t future risks, they are live and biting.

🧪 High-NA EUV: The Real Test of Dominance

The Twinscan EXE:5000 changes the game:

• Enables 2-angstrom node, Moore’s Law enters the Angstrom era

• €300M per unit

• First system delivered to $INTC

• $TSMC and Samsung expected to adopt by 2026

But there’s a catch. TSMC still hasn’t formally committed. They’re evaluating feasibility, yield, and cost-of-ownership. ASML is trying to accelerate ecosystem adoption through its new High-NA lab in partnership with imec.

If the timeline slips, legacy EUV cannibalisation could become a risk. Alternative litho tech from Tokyo Electron or Canon could gain traction. ASML’s moat remains deep, but it isn’t untouchable.

📉 Cyclicality: Softened, Not Solved

Services help smooth out the cycle, now making up 26% of revenue. Still, 77% of top-line exposure is tied to fab expansion. If AI demand pauses or High-NA lags, ASML feels it fast.

As the Financial Times noted, even monopolies get whiplashed when sales hinge on massive, episodic equipment deals. Smooth isn’t always sequential.

📉 Options & Short Interest: Setting the Trap

• Implied move: 6.6%, below 5-year average of 9.4%

• Median historical earnings move: 7.9%, with prior peaks over 12%

• OI heavy at $820 and $860

• IV crush post-ER creates asymmetric setup for long-dated calls or short puts

• Short interest: 0.32%, but could spike on margin miss

📐 Technical Picture: Setup is Clear

• Inverse H&S confirmed

• Neckline: $779

• Closed: $801.93

Target levels I’m watching:

• $820: Breakout trigger

• $860: First scale

• $907: 0.618 Fib and monthly gap

• $1,110: Full Fib

• $1,254 and $1,438: Long-term extensions

Below $779 invalidates the setup. No hesitation if that breaks, I’ll rotate to better risk-reward.

🌐 Macro Framing: Trump Tariffs Looming 🇺🇸

Beyond CPI, PPI, and the Fed’s tone, I’m tracking the re-escalation of U.S.–China trade rhetoric.

Trump’s latest tariff proposals include semiconductors and related tech. If implemented, they could alter ASML’s client capex behaviour in China, Southeast Asia, or even Korea.

Any comment from ASML management on client hesitations tied to trade could be a market-moving bombshell.

📚 AI Stack Thesis: ASML Is Tier 1

The AI chip market is projected to grow from $96B to $927B by 2034, a 29% CAGR. ASML is upstream of every name in the trade.

• Tier 1: $ASML, $TSMC, $AMAT

• Tier 2: $NVDA, $AMD, $AVGO

You don’t build a Tier 2 chip without Tier 1 machines.

📚 From Ed Conway’s Material World:

“We are only a few chip generations away from the Angstrom era, where transistors will be measured in 0.1 nanometers.”

This isn’t theory. It’s ASML’s delivery roadmap.

🧠 Analyst Sentiment: Bullish, But Fragile

• Wells Fargo: Overweight, PT $890

• JP Morgan: Overweight, PT trimmed to $1,100

• Susquehanna: Positive, PT $965

• Mizuho: Hold, PT €650 (vs €681 spot)

• Morgan Stanley: Equal Weight, PT €660

Bloomberg consensus sees ~10% upside from here, but positioning is cautious. A beat and raise could trigger a chase. A margin slip could trigger a fade.

📌 Execution Plan

• If earnings beat and High-NA commentary lands, I’m targeting:

🎯 $820 breakout

🎯 $860 scale

🎯 $907 Fib fill

🟠 Holding core for $1110+

• If we fade on print, I’ll use IV crush to enter via debit spreads or bull put spreads

📅 Watchlist This Week Also 👀

• $NFLX: Thursday AMC, 7.8% implied move

• $TSMC: Thursday BMO, watch for High-NA capex language

• $INTC: Deployment of EXE:5000

• $META, $MSFT: Next week, AI infra demand tone

• $SOXL, $SMH: ETF inflows and rotations

🏁 Conclusion

ASML’s moat is real, but this quarter is the most important in years.

The stakes include High-NA delivery credibility, geopolitical realignment, and fab capex psychology. One miss won’t kill the thesis, but it will reshape the timeline.

This is not just a print. It’s a reckoning for tech’s most irreplaceable supplier. I’m not hoping for alpha. I’m hunting it.

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Trade like a boss! Happy trading ahead, Cheers, BC 📈🚀🍀🍀🍀

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