ASML's huge fourth-quarter orders has analysts reevaluating the chip sector
While Netflix (NFLX) earnings are powering most of the feel-good sentiment on the Nasdaq Composite (IXIC) today, there's also a chipmaker's earnings report across the pond that is having a wide-ranging impact on tech stocks stateside.
Dutch semiconductor giant ASML Holding NV (NASDAQ:ASML) is up 7.5% to trade at $836.84, on track for its best single-session pop since November 2022, after the company reported a top-line fourth-quarter beat, which featured orders 165% above consensus.
Jefferies called the report a "blockbuster," helping the company "comfortably" hit its 5% growth forecast for 2024. Sector peers Advanced Micro Devices (AMD), Intel (INTC), and Applied Materials (AMAT) are all up 1% or more at last check.
ASML hit a more than two-year high of $840.92 out of the gate, and even before today's breakout had added 48% off its Sept. 28 annual low of $563.99. You might remember this stock as a Schaeffer's Top Stock Pick in 2023, when it snapped up a 38.5% annual return. To access our free Top Stock Picks of 2024 report, click here.
The stock is doing this with a heavy bullish backdrop baked in. The majority of analysts rate ASML a "strong buy," with zero "sells" on the books, and a slim 0.3% of the equity's total available float is sold short.
Options traders are call skewed as well. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio of 1.98 is four percentage points from an annual high. So not only do calls outflank puts by a 2-to-1 ratio, but the elevated percentile indicates a healthier-than-usual appetite for long calls relative to puts on ASML during the past two weeks.