It appears ASML Holding (ASML 3.34%) has experienced a momentary lapse in the market’s affections, a decline of 3.3% by midday Friday. One is tempted to remark on the volatility of sentiment, but then, what is the market if not a fickle mistress?
Just days ago, the oracles at Goldman Sachs deigned to issue a ‘buy’ recommendation, and scarcely a day has passed since Micron (MU 3.72%) delivered earnings that, while spectacular, did little to buoy its own share price. A curious paradox, wouldn’t you agree? It seems investors are as adept at punishing success as they are at ignoring prudence.
The Illusion of Progress
Goldman Sachs, in its wisdom, cited a burgeoning demand for semiconductors, a revelation gleaned from Nvidia’s (NVDA 1.69%) recent GTC conference. One suspects the bank’s motives are less about genuine insight and more about the profitable art of appearing prescient. Still, ASML’s machines are undeniably central to this technological theatre, and a strategically important cog in the relentless march of progress – or, as I prefer to think of it, the increasingly elaborate machinery of our own distraction.
Micron’s planned capital expenditure, the very reason analysts now whisper of cheaper valuations, will, naturally, find its way into ASML’s coffers. A delightful circularity, wouldn’t you say? It is a truth universally acknowledged that a company in possession of capital must be in want of more machines.
The Price of Anticipation
That Micron’s spending translates to ASML’s gain, and Nvidia’s AI ambitions will further accelerate that flow, is hardly a revelation. The real question, of course, is whether the market is willing to pay a premium for such anticipated prosperity. At 47 times trailing earnings, ASML is not merely expensive; it is an exercise in optimistic accounting.
Yet, with analysts forecasting a long-term earnings growth rate nearing 19%, and the whispers of good fortune emanating from both Nvidia and Micron, perhaps such extravagance is justified. Or perhaps, we are simply witnessing the triumph of hope over reason. After all, it is far more comfortable to believe in a glorious future than to confront the unvarnished truth of the present. And as I always say, a high price is often merely the reflection of an even higher degree of delusion.
Indeed, it is not enough to be expensive; one must appear to deserve the expense. And in this, ASML, for the moment, succeeds admirably.
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2026-03-20 19:32