Top Semiconductor Stock to Invest in Now: Mizuho Analysts Shift Focus to ASML (AS:) for Compelling Risk-Reward Opportunity
Mizuho analysts have recently made a bold move by shifting their favorite semiconductor stock recommendation from TSMC to ASML (AS:). This decision comes in light of ASML's underperformance compared to its peers, presenting an attractive opportunity for investors.
Despite TSMC's impressive 16% rise in September, ASML has only seen a modest 0.8% increase during the same period. Mizuho analysts believe that ASML is now primed for significant gains by the end of the year, positioning it as a top pick for long-term investment.
Market sentiment surrounding ASML has been dampened by concerns over Intel's capital expenditure cuts and China restrictions. However, Mizuho views this as a buying opportunity, as they believe the negative sentiment has already been priced into the stock.
Looking ahead, Mizuho anticipates stable third-quarter results for ASML in October, with a key investor day event scheduled for November 14. The analysts are optimistic about ASML's long-term revenue targets for 2025, estimating them to be between €30-40 billion.
With ASML's valuation expected to expand back to a 30-32 forward P/E range, Mizuho sees limited downside and significant potential for upside. They believe that even minor reductions in revenue estimates could pave the way for a rally in the stock.
In conclusion, Mizuho's shift in focus to ASML highlights a lucrative opportunity for investors looking to capitalize on the semiconductor sector's growth. By considering ASML's underperformance, market sentiment, and upcoming events, investors can make informed decisions to potentially maximize their returns in the long run.