Milford Asset Management’s Andrew Curtayne pitches Dutch chipmaker ASML at the Sohn Hearts & Minds investment conference, saying it’s best placed in the AI supply chain with 70 per cent upside that will become Europe’s first $US1 trillion business.
“It is the power that binds everything together,” he told the audience. “Without ASML, there would be no leading edge chips.”
ASML is a lithographer which is crucial in the manufacturing and printing of high-end chips and has a 90 per cent market share, but got caught up in the savage sell-off of artificial intelligence stocks overnight.
“The timing cannot be better today, because as of the technology sell-off last night, that stock has just got about 10 per cent cheaper,” the Kiwi-based fund manager said.
“With the sell-off last night, and over the last few days, all of these stocks have gotten cheaper, which makes it the perfect hunting ground.”
“There’s potential data set in a moratorium with the Democrats,” he added, referring to the US midterms. “The US has only gone to make the returns higher for those that have got data centres, either online or about to come online.”
Curtayne said the stock was “significantly mispriced for the growth of this business and the monopoly status,” at 22 times earnings. He added that it should be on a multiple of 22 times 2028 earnings which implies a 70 per cent upside.
“At the next earnings results, they’re going to report their order back book, which will be the first time they’ve done this in over a year. This will give the market a lot of confidence on the outlook for the business over the next couple of years.”
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