Dutch semiconductor chip firm ASML is a very underrated stock in 2025, thanks to one key metric that could drive shares upward. The company recently reported its Q4 2024 earnings, blasting expectations out of the water. Its strong results and robust bookings corresponded with solid guidance for the next five years according to ASML.
ASML has a virtual monopoly on EUV machines that are used to make advanced chips. The company’s fourth-quarter earnings report revealed a surge in orders, showing that demand is high. This boom in demand and positive results helped the stock rise a bit, as it is up 7% in the last five days. Along with the positive results, its ability to withstand the recent arrival of DeepSeek AI helps make it an underrated option according to analysts.
Additionally, ASML has introduced a new technology called a high numerical aperture extreme ultraviolet lithography system, or High NA EUV, that it is trying to sell to its largest customers. With orders on the rise and continued innovation, ASML may be a tough choice to avoid if you want an underrated stock in your portfolio. For 2025, the company expects to generate revenue of 30 billion to 35 billion euros ($31.1 billion to $36.3 billion), with a Q1 revenue of 7.5 billion to 8 billion euros ($7.8 billion to $8.3 billion). Gross margins are expected to be between 51% to 53% for the year and between 52% to 53% for the first quarter.
ASML To Exceed Expectations in 2025 Quarterly Results?
The company said that if AI chip demand remains strong and more manufacturing capacity is built to help meet that demand, revenue could be toward the upper end of that range. Meeting this demand and posting positive numbers throughout the year could give investors in ASML stock consistent profits. Further, ASML continues to see the opportunity for 2030 revenue of between 44 billion to 60 billion euros ($45.7 billion to $62.3 billion), with gross margins improving to between 56% to 60%. It sees this being driven by strong overall chip demand as well as strong AI demand creating a shift more toward advanced chips that need EUV technology.
Also Read: META Stock Eyes 12th Straight Gain, Adds $235B in Record Streak
ASML is trading at $731.41 per share, nearly 20% below its estimated fair value of 902.06 based on discounted cash flow analysis. The company’s forecasted earnings growth outpaces the Dutch market but remains below significant thresholds, highlighting moderate undervaluation potential.