ASML: Memory Chips & the Dutch Miracle

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Alright, settle in, folks. Let’s talk about ASML (ASML 2.19%). This isn’t your grandmother’s semiconductor equipment manufacturer, unless your grandmother happens to be a Dutch engineering genius. They just posted a Q4 that was…well, let’s call it “robust.” Revenue up 29% year-over-year? That’s not a bump, that’s a catapult! Full year net sales hit 32.7 billion euros. Thirty-two…BILLION! I’m starting to think these guys are printing money…literally, with their fancy lithography machines.

Earnings per share jumped 33% to 7.35 euros, which is lovely, truly. But, and there’s always a “but,” isn’t there? It missed estimates. Wall Street, those picky eaters, always want more. The stock took a little tumble, which, frankly, is a gift. A gift, I tell you! It’s like finding a Rembrandt in a garage sale. The valuation is…ambitious, at 55 times earnings. It’s so high, it needs oxygen. But don’t let that scare you. This isn’t about sensible investing; it’s about the future of memory!

Now, ASML strolled into 2026 with a backlog of $38.8 billion. Thirty-eight…BILLION! That’s enough to build a small country, possibly one entirely dedicated to storing cat videos. Quarterly bookings hit 13.2 billion euros, which sent analysts scrambling to recalculate their spreadsheets. They’re predicting net sales between 34 and 39 billion euros for ’26 – a tidy 12% bump. It’s practically printing money, I tell you!

The secret sauce? EUV machines. Extreme Ultraviolet Lithography. Sounds like something out of a sci-fi movie, doesn’t it? They’re used to make memory chips, those tiny silicon squares that remember everything from your grocery list to your questionable search history. And guess who’s buying them? Micron Technology, one of ASML’s biggest clients. These chips are in demand, folks. Demand! It’s like trying to get a decent bagel on a Sunday morning.

Fifty-six percent of those bookings were for memory systems. Memory! The stuff dreams are made of…and also, you know, data storage. Logic systems grabbed the remaining 44%. It’s a good split, a balanced breakfast for the semiconductor industry.

“Perfect Storm” for Memory Systems

ASML’s CEO, Christophe Fouquet, is predicting a “perfect storm” for memory systems sales in 2026. A “perfect storm,” he says. I’m picturing tiny silicon chips riding surfboards. But seriously, demand for high-bandwidth and double-data-rate memory is “very strong,” and supply is tight. Apparently, data centers are getting bigger, AI infrastructure is booming, and everyone’s upgrading their DRAM nodes. It’s a whole thing. A complicated, silicon-based thing.

He says EUV is going to make DRAM even more important. More EUV layers, more DRAM share. It’s a virtuous cycle, folks. A beautiful, silicon-powered spiral of profit. They’re anticipating this dynamic to continue for years to come. Years! I’m starting to think these guys have a crystal ball, or at least a really good market research team.

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Now, the stock dipped a bit on Wednesday, despite all this good news. Why? The high valuation, the earnings miss, and…wait for it…1,700 job cuts! Streamlining, they call it. Investing in engineering and innovation. It’s a classic corporate maneuver. Cut costs, boost profits, and pretend you’re a benevolent genius. It’s all part of the game, folks. All part of the game.

But here’s the thing. ASML’s secret weapon isn’t just EUV machines. It’s the relentless demand for memory. And that demand isn’t going anywhere. So, hold onto your ASML stock, folks. Hold on tight. And if you’re looking to get in, maybe wait for a dip. A little dip. A tiny, insignificant dip. Because this is a company that’s building the future, one silicon chip at a time. And that, my friends, is a beautiful thing. A truly beautiful thing. Now if you’ll excuse me, I need to go upgrade my RAM.

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2026-02-02 16:52