ASML, a semiconductor manufacturer equipment (ASML), has a great point about its value proposition.

ASML expects that sales of its semiconductors should rise in the short term, despite a lack thereof. It’s so positive that it has raised its outlook for the long-term. ASML is a great investment and it makes me very happy.

ASML stock experienced a steady rise over the past year, with some bumps. TipRanks has ASML stock chart.

ASML actually looks good from here. The company anticipates steady annual growth right through 2030.

Also, it expects growth to be in the range of 11%. Peter Wennink (CEO of the company) suggested that these numbers are pessimistic. They don’t include possible extra demand from three major worldwide markets — China, Europe, and the United States — based on an increased push in those regions for “technological sovereignty.”

These pushes could fall apart, and the projected numbers may rise even more.

ASML upgraded its revenue estimate to between €24 billion and €30 billio — about $27.8 billion to $34.8 billion. Earlier forecasts called for the company to bring in between €15 billion and €24 billion.

Wall Street Take

ASML has been rated a Strong Buy by Wall Street analysts. According to the analysis of the four ASML analysts who have 12-month price target on ASML, three assign a Buy rating and one gives a Hold.

There is a 26.1% upside possibility for ASML prices. The ASML average price target is $921.89.

In a Gold Rush, Shovels for Sale

There’s an old maxim about how the only people who really got rich in the gold rush weren’t the miners — though some undoubtedly did — but rather the people who sold supplies to the miners.

While they were able to do less business per day, the majority of their business was daily. People who sold beans or shovels soon outperformed those who pursued gold.

ASML is not too dissimilar. The current shortage in semiconductors is alarming. ASML doesn’t sell chips but does sell the technology to make chips. ASML will be a great resource for all the semiconductor companies that are looking to increase production to meet spiraling processor demand.

However, there is one caveat. As a natural result, ASML should see its business grow on the strength and demand for massive semiconductors.

ASML does not offer semiconductors. It only provides the tools. ASML’s success is dependent on semiconductor producers expanding current production lines. It’s difficult to see how this can be accomplished given the current labor shortage.

However, we have already witnessed some growth. Already, both Samsung (KS) and Taiwan Semiconductor Manufacturing have made improvements. TSM will spend $100 billion on its own production over the next three year to boost it.

Conclusion Views

ASML is optimistic because of two factors. The first is that the current chip shortage must not be stopped. Chip makers must be prepared to increase their production to keep up with the increasing demand.

ASML projects are more likely to be in demand, but the current level of demand might not prove as long-lasting. The company is likely to experience at least some uptrend in the next few months. ASML is optimistic that the final result will be better than expected, but it still has potential to provide value for shareholders.

Disclosure: Steve Anderson didn’t hold any positions in the securities listed in this article at the time it was published.

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