ASML: Margin Expansion Is Just Getting Started

ASML delivered another beat-and-raise quarter, with Q2 revenue, EPS and gross margin all coming in above expectations. Advanced logic demand remains strong across 3 nm, 2 nm and early 1.4 nm investments, while memory system sales are set to benefit from major DRAM and HBM capacity additions. Installed Base Management, system mix, pricing and controlled operating expenses create several paths for further margin expansion. Despite the premium valuation, ASML’s earnings growth and structural position in advanced lithography still support a Buy rating.

I have covered ASML (ASML) twice before, once at a Strong Buy rating just about a year ago and again at a Buy rating earlier this year. The stock has since returned 133% and