ASML, ASMI, STMicro: Europe’s Chip Names Into Earnings

Europe. Europe’s semiconductor names go into third-quarter reporting with one of the more aggressive sell-side calls of the season behind them. In a 29 September note reported by Investing.com, UBS analyst Francois-Xavier Bouvignies raised his wafer-fab equipment forecast to about $225 billion for 2027, up 43%, with $275–300 billion possible by 2028. His 2027–2028 numbers sit more than 10% above consensus.

## The names
- ASML (Buy, €2,350 target) reports on 14 October. UBS expects guidance for 2027 revenue growth above 30%, third-quarter revenue of €12.1 billion, 3% above consensus, and sees pricing as the biggest earnings lever.
- ASM International (Buy, €1,325) reports on 27 October. UBS forecasts 36% revenue growth in 2027, against 29% consensus.
- STMicroelectronics (Buy, €80) reports on 29 October. UBS puts 2027 EPS about 20% above consensus, helped by silicon photonics and AI data center power, and expects fourth-quarter revenue guidance about 10% above the third.

## What the funds did
Second-quarter 13F filings show a split. Coatue Management cut its ASML stake by 41%, according to BBAE’s review, while Stanley Druckenmiller’s Duquesne Family Office raised STMicroelectronics by about 19%, to $232.4 million. Dev Kantesaria’s Valley Forge left its ASML holding untouched, per 41 Investments. All of those positions date from 30 June.

## The risk
Valuation is the obvious one. UBS itself notes that ASMI trades at 7.9 times forward EV-to-sales, against a 10-year average of 5.7 times. Rates are the other: the European Central Bank raised its deposit rate to 2.5% on 10 September, its second hike since June, with euro zone government bond yields at 15-year highs, Euronews reported. When the bull case already sits well above consensus, a cautious guide leaves little cushion.

Sources: Investing.com, BBAE, 41 Investments, Euronews. This is information, not investment advice.