- BofA Securities reiterates Buy on ASML, calling the recent selloff overdone.
- The bank estimates a Chinese shift to domestic DUV tools would cut next year's sales by only about €1.4 billion (2.4%).
- Analysts highlight ASML's unmatched EUV leadership and attractive valuation.
BofA Securities has thrown its weight behind ASML Holding NV, reiterating its Buy rating and price target after the stock tumbled on renewed China jitters. The bank's analysts argue the selloff was an overreaction, with the potential revenue hit from a Chinese pivot to domestic deep ultraviolet (DUV) tools pegged at a manageable €1.4 billion, or roughly 2.4% of next year's sales.
"ASML's EUV leadership remains unmatched," a BofA note said, emphasizing that the Dutch lithography giant's competitive moat is intact despite geopolitical headwinds. The bank views the current valuation as an attractive entry point for long-term investors.
The optimism comes as ASML faces scrutiny over export controls and China's push for self-sufficiency in semiconductor equipment. While a shift to domestic DUV tools could dent near-term revenue, BofA estimates the impact is limited given ASML's dominance in extreme ultraviolet (EUV) technology, which is critical for advanced chipmaking.
"The market is overestimating the near-term risk from China," one analyst wrote, citing ASML's entrenched position with global chipmakers. The bank's confidence is bolstered by expectations of a recovery in foundry and logic capital expenditure, which should drive demand for high-end lithography systems.
ASML shares have rebounded slightly since the note, though the stock remains below recent highs. A spokesperson for ASML declined to comment on the BofA analysis.
*Correction: An earlier version of this article misstated the percentage impact on sales. The correct figure is 2.4%.