Shares of ASML Holding (ASML) and other semiconductor equities are falling Wednesday morning in response to a Bloomberg report outlining the Biden administration’s plans for stricter trade regulations on chip exports to China.
InsingerGilissen senior analyst Jos Versteeg joins Morning Brief to give insight into the chip sector and why he believes ASML will continue to perform well.
“I don’t think that the immigration implications are so bad for ASML. When you look at China, China semiconductor manufacturing, they are using mainly low-end chips and the US wants them to keep on producing low-end chips because the world needs it,” Versteeg comments. “Some years ago, there was a very interesting report from the [US] National Security [Commission for Artificial Intelligence] led by [Chairman] Eric Schmidt and it was said that the US should prevent China from becoming better and better in AI, because who is the best in AI will win the next war.”
ASML shares have pulled back despite reporting a beat on second-quarter earnings, though the stock is up by over 30% year-to-date in 2024.
“When you invest in these kind of tech companies, you can get a very, very nice performance. But now and then, there’s a rainy day, and that’s the way I see it. So just from the beginning of the year, you’re still in a big profit. So I actually don’t worry about it,” Versteeg says.
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