ASML Has Just Delivered Massive News for Micron Technology Investors

ASML Holding (ASML 0.93%) is a man-made intelligence (AI) bellwether, as its excessive ultraviolet lithography machines are the one ones that allow foundries, reminiscence producers, and built-in gadget producers to print superior chips for a number of AI purposes.

The chips manufactured utilizing ASML’s machines are deployed in smartphones, private computer systems, and knowledge facilities, amongst different purposes. So the corporate’s newest outcomes bode effectively for AI stocksas they clearly present that demand for AI infrastructure is so robust that firms have been investing aggressively to construct extra capability.

So do not be stunned to see AI shares akin to Micron Technology (MU +8.34%) head increased following ASML’s newest report. Let’s see why which may be the case.

ASML expects the reminiscence scarcity to proceed

ASML has boosted its 2026 income steering. It now expects its income to extend by 16% yr over yr to 38 billion euros on the midpoint of its steering vary, up from its prior expectation of 11.6% progress. ASML administration attributes the improved steering to the rising capital bills of its prospects.

Today’s Change

(-0.93%) $-13.59

Current Price

$1445.38

Key Data Points

Market Cap

$562B

Day’s Range

$1378.85 – $1477.87

52wk Range

$651.46 – $1547.22

Volume

101K

Avg Vol

1.8M

Gross Margin

52.60%

Dividend Yield

0.53%

Importantly, ASML factors out that its prospects are witnessing wholesome demand from their very own prospects. As a end result, ASML anticipates that its prospects will proceed to extend their manufacturing capacities in 2026 and 2027. There is an easy cause ASML’s prospects, which embrace foundries akin to Taiwan Semiconductor Manufacturing and Samsung and reminiscence producers akin to Micron, are boosting capital investments: surging demand.

Micron will proceed benefiting from a positive pricing surroundings

ASML administration highlighted on the newest earnings name that reminiscence provide is unlikely to fulfill demand within the foreseeable future. This is nice information for Micron Technology traders, who’ve seen a exceptional 60% enhance within the firm’s inventory up to now this yr.

Micron stock has benefited from the scarcity of reminiscence chips, which has led to a surprising soar within the costs of each dynamic random-access reminiscence (DRAM) and NAND flash storage chips. Analysts expect the corporate’s non-GAAP earnings to leap nearly sevenfold within the present fiscal yr. Even higher, Micron’s earnings may enhance by a powerful 70% within the subsequent fiscal yr.

However, Micron may exceed expectations as DRAM costs are anticipated to leap by 125% this yr, whereas NAND flash costs are anticipated to leap by 234%, based on Gartner. With Micron buying and selling at simply 22 instances earnings, it’s time to purchase this inventory hand over fist, as ASML’s feedback point out that the favorable pricing surroundings it enjoys is right here to remain.

Analysts are anticipating Micron inventory to leap one other 21% within the coming yr, primarily based on its 12-month median worth goal of $550. Also, 92% of the 48 analysts masking Micron fee it as a purchase. All this implies that Micron is a no brainer purchase proper now, particularly on condition that it will probably crush the median worth goal as soon as the market rewards it with a premium valuation for its eye-popping earnings progress.