ASML Earnings: We Maintain Valuation as Pockets of Strength Help To Offset Cyclical Memory Weakness

We maintain our $750 per share fair value estimate for ASML following solid second-quarter results that fell mostly in line with our expectations. ASML topped out its guidance for sales and margins in the second quarter and raised its full-year guidance, but the demand backdrop for many of its chipmaking customers remains weak. Memory customers in particular continue to wrestle with an especially severe downturn. Still, ASML holds an impressive backlog of orders that we expect will allow it to post strong growth through 2023 and 2024. Shares dipped on macro commentary, but we’d encourage investors to seek a greater discount before picking up shares.