ASML's earnings were strong—revenue over 11 billion euros, profit above expectations, margin near 60%—and its EUV monopoly has 2027-2028 sold out with demand strong through 2030. But it is cyclical, at 53x earnings versus half two years ago, so now is a time to hold, not buy; AI end-customer revenue is a risk.

When we return, we will talk about ASML's profits. We'll be back in a few moments. Welcome back to the program. ASML announced its earnings before the market opened today, Rachel.

The results looked very good, and I don't think that's surprising because they sell equipment that takes years to manufacture, and they have a huge waiting list.

Yes, that's absolutely true. I mean, if you're not familiar with ASML, it's a Dutch tech giant. They have a monopoly on the manufacture of extreme ultraviolet or EUV lithography machines.

These are extremely complex systems that weigh several tons. It prints microscopic circuit patterns onto silicon wafers. Therefore, ASML serves as the gatekeeper of the semiconductor industry.

Not all advanced chips, and Nvidia's AI processors, could be manufactured without it.

So, that was a brief overview of the company. ASML generated revenues exceeding 11 billion euros, with profits significantly higher than expected, and a gross profit margin approaching 60%.

The CEO has already warned that their planned production capacity for 2027 and 2028 has already been completely sold out. They will not be able to fully meet customer demand. Essentially, you own the sole supplier of the world’s most important chip-making equipment.

They say they cannot build machines fast enough to keep up with the market until the end of the decade.

So I think the biggest conclusion we continue to see here is that the building of the core AI infrastructure is not going to slow down anytime soon. On the contrary, I think there is a question about whether there is an artificial ceiling for the amount of revenue that this company can mathematically achieve over the next two years.

Therefore, there are constraints on the supply chain side. But in the long run, this is great for the industry and certainly great for ASML.

If, a lot of revenue, a lot of profits. This is a bottleneck, and the stock is up 0.1% as we record this. And perhaps this is true. I mean, look, Rachel said so, but this is probably the hardest company in the world to look at its quarterly results and predict anything, okay?

The advanced machines we are talking about take 18 months from order to delivery. It needs to be installed and prepared. You need two huge planes to transport and install it. Therefore, it is difficult to make a radical change here.

High demand until 2028 and continuing into 2030 confirms the validity of the trend. I don't think this will surprise anyone, and that's why I think the stock isn't moving.

But look, there were some good comments here. They cannot sell high-end devices to China, but they can sell less advanced and more common devices, and they are seeing high demand and revenue from China.

This is good because it represents an additional increase. That's not what we were focusing on, you know. Also, they are expanding their production capacity by 30% over the next few years, and they see sufficient long-term demand to invest some of this cash, and perhaps even more.

I would like to warn you that you should submit your applications early, and most of them are cancelable. So, I don't know what to think of the demand forecast for 2030, but it's good that they are forecasting it.

In short, ASML stock is a cyclical stock. There are times to buy, and there are times to hold. It is currently trading at a price-to-earnings ratio of 53 times. Um, you could have bought it for half this price two years ago.

This is the time to hold the stock, and this is what the stock is doing right now.

Yes, the question the market is asking today, with many cloud startups dropping by double digits as we record, is: there will certainly be huge demand for AI in the future, but who is the end customer from whom they will generate revenue?

I mean, who are companies like Anthropic and OpenAI? There have been some reports suggesting that they may not be achieving the revenue growth we were expecting just a few months ago.

Therefore, this ultimately affects ASML and semiconductor manufacturing companies. So, there's a lot to watch over the next few quarters for them.