Stock-Split Watch: Is ASML Next?
2026-10-23 09:01
•Harsh Chauhan •The Motley Fool
••••••• •• Axe Cap view
Is ASML the Next Stock-Split Candidate?
Strong Q3 growth and deep order backlog position ASML well, but what does it mean for South African investors?
ASML, a key player in semiconductor manufacturing equipment, delivered a stunning 55% revenue jump in Q3, fueled by booming demand for EUV lithography machines vital to AI chip production. Despite outpacing industry peers in growth, its stock has lagged partly due to one of the highest price tags in the sector, making it less accessible to retail players. A stock split could fix that, broadening the shareholder base and potentially unlocking multiple expansion. For us, the South African angle is less direct since ASML isn’t JSE-listed, but this tech surge reinforces the dollar strength that pressures the rand. Tech imports into SA will stay pricey, tightening margins for local firms reliant on such input. Watch Standard Bank and FirstRand for currency hedging cost trends, and consider that the 27x forward earnings multiple is a relative bargain globally. This bull case could fail if global chip demand cools sharply or if supply chain issues emerge, but for now, ASML looks poised to grow, prompting caution on rand exposure. this is just our opinion and not financial advice
Avoid direct exposure in the rand given dollar strength linked to semiconductor demand but watch banking stocks like Standard Bank for currency hedging trends. Consider trimming rand exposure if USD/ZAR rises above 19.50.
- USD/ZAR
- Standard Bank
- Global chip demand slowdown
- Supply chain disruptions impacting ASML production
6/10
ASML, a critical semiconductor equipment manufacturer, has underperformed the broader semiconductor sector over the past three years despite strong fundamentals. The article suggests a stock split could boost retail investor interest. ASML's Q3 results showed impressive 55% revenue growth to 11.66 billion euros, driven by strong demand for EUV lithography systems used in AI data centers. The company plans to increase capacity by 30% in 2027 and has customer orders extending to 2029-2030, indicating sustained growth momentum. ASML trades at an attractive 27x forward earnings, below its five-year average of 33x.
Our take is based on reporting first published by The Motley Fool.