Chicago, IL – April 16, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include ASML Holding N.V. ASML, NVIDIA Corp. NVDA, Intel Corp. INTC and Taiwan Semiconductor Manufacturing Company Ltd. TSM.
A series of President Donald Trump’s ambiguous tariffs on several other countries, including China, wreaked havoc on Wall Street, and semiconductor stocks suffered the consequences. However, the latest tariff exemptions on chips and other high-tech goods boosted the equity market, leading to a recovery in many previously declining semiconductor stocks.
Therefore, this is an ideal time to invest in strong semiconductor stocks, such as ASML Holding N.V. and NVIDIA Corp., which are currently trading at a discount following a recent drop but are poised to benefit from the upcoming rebound.
Of course, the tariff reliefs are temporary, and these semiconductor stocks may experience bouts of volatility if trade disputes remain unresolved within the specified time frame. However, these stocks have a wide moat, providing them a competitive advantage and immunity to market fluctuations. Let’s examine this in detail –
Dutch company ASML is the global leader in producing extreme ultraviolet (EUV) lithography systems, which are essential for manufacturing powerful artificial intelligence (AI) chips. The lithography equipment is pricey, so the company doesn’t need to sell many to make sufficient revenues.
Although the company sold only 44 EUV systems last year, they accounted for 38% of its total net system sales of 21.8 billion euros. It sells to major chipmakers like Intel Corp. and Taiwan Semiconductor Manufacturing Company Ltd.
Having a monopoly in EUV lithography systems could potentially lead to market share loss, with China developing similar systems. However, manufacturing these systems is time-consuming due to their complex nature. Thus, the current risk of losing the monopoly is minimal, allowing the company to sustain long-term growth for stakeholders.
Similarly, Jensen Huang-led NVIDIA enjoys a more than 80% share in the growing discrete graphic processing units (GPUs) market, giving the company a competitive edge over its rivals and fueling long-term growth. The company’s CUDA software platform is gaining popularity globally among developers, while the demand for Blackwell chips has skyrocketed due to their better energy efficiency level and faster AI interface.
For some time, the rapid growth of AI applications has spurred the demand for advanced memory chips that require ASML’s EUV equipment for their manufacture. ASML’s EUV lithography machines experienced an increase in new orders in the fourth quarter of 2024 and are anticipated to see a surge in first-quarter 2025 bookings as well.
This is why, ASML is on track to post a strong first quarter and help the stock regain its mojo. For the first quarter, the company expects revenues of 7.5 billion euros to 8 billion euros, a substantial 46% increase year over year. The earnings are estimated to come in at 5.75 euros a share, a jump of 85% year over year.
The continuous rise in AI data center spending will benefit NVIDIA in the long run. To meet the growing demand for AI workloads, major cloud computing companies are purchasing GPUs for their superior computing power.
Three of the big cloud computing stocks are planning to spend $250 billion on AI data center infrastructure, while OpenAI, Softbank, and others are expected to spend $500 billion on data centers through the Stargate project. For these reasons, NVIDIA predicts that AI data center expenditures will reach $1 trillion by 2028, providing room for stock growth.
ASML’s global leadership in lithography and increasing product demand make its stock a compelling buy. Its shares have fallen 3% year to date but have gained 0.6% on Monday on Trump’s tariff reliefs.
ASML’s expected earnings growth rate for the current year is 23.1%, and brokers have raised ASML’s average short-term price target by 42.3% to $953.61 from the previous $668.81.
Dominance in the GPU space and a rise in AI infrastructure spending should help NVIDIA stock climb upward, making it an enticing buy. Its shares have tanked 17.8% this year but the company anticipates a 47.5% growth in earnings for the current year.
Brokers have raised NVDA’s average short-term price target by 56.8% to $173.95 from the previous $110.93 (read more: Which Mag-7 Stock, Apple or NVIDIA, Should You Buy for Tariff Relief?)
Both ASML and NVIDIA currently have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
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Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Previewreports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
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