ASML Stock Q4 2025

Earning call

2025 Q4

Well here we are in Q4 2025 and as said earlier the price has kept increasing but the risk reward equation is not what it once was with now a 46x P/E and I feel that I can find better risk reward.

On a risk reward axis I would put it here now :

For memory this was my valuation in Q1 2025 :

As we can see EPS ended up better than even my best case which is great, backlog are also looking great BUT we have to keep in mind that ASML and the semiconductor industry at large is cyclical and should guidance change because of a change in the situation the stock will follow.

They also haven’t change their long term-guidance as I think management understand that there will be up and downs :

And now the price is implying that ASML has to continue to perform perfectly without hiccups, which is not likely to me in such a cyclical industry that is exposed to geopolitical and technological risk.

A few examples of such risks :

-https://newsletter.semianalysis.com/p/how-to-kill-2-monopolies-with-1-tool

-https://www.huaweicentral.com/huawei-is-allegedly-testing-china-made-euv-chip-making-machine/amp/

-Nikon patent war may come back in 2029 As we saw in our analysis

-Invasion of Taiwan from china

I am satisfied with my 2x in 1 year. It’s not always that we have such good returns in such a short period of time. And I said previously that if the price continues to increase drastically, and it has, I would reduce the position as potential upside would diminish but risk would increase.

As such, I will further reduce my position and will keep a small one to continue following the company and buy it again if it presents a better risk/reward opportunity.

Now having said this, I still think ASML is a great company and can probably still increase in price if there is continuing good results and some exuberance. But at those prices there are just better opportunities elsewhere with less risk right now in my opinion.