asml considers stock split as share price soars
Netherlands, Monday, 23 December 2024.
ASML Holding, a prominent player in the semiconductor equipment industry, is contemplating a stock split due to its high share price, currently exceeding $700. This move could make ASML’s shares more appealing to retail investors and is viewed as a sign of growth. However, the company has not split its stock in over a decade, and recent performance struggles might delay such a decision. ASML’s stock has dropped 33% from its peak in summer 2024, and the company faces challenges with weak bookings and reduced demand from China. Despite these issues, the company recently returned to year-over-year revenue growth. A stock split could signify confidence in future performance, but analysts suggest it may only occur if shares rise significantly, possibly exceeding $1,000 again. Investors are closely watching ASML for any announcements, as its peers in the semiconductor sector have recently completed stock splits.
Historical splits and market context
ASML has executed five stock splits throughout its history, with none occurring in the past decade [1][3]. The company’s current evaluation of a potential split follows similar moves by industry peers, including Nvidia, Super Micro Computer, and Broadcom [1]. While management has not officially announced any plans [1][3], such decisions typically remain undisclosed until finalized [1].
Current market position
ASML’s market performance presents a mixed picture. The company maintains a substantial market capitalization of US$281.36 billion [5], with total revenue of €26.24 billion and earnings of €6.93 billion [5]. However, the stock has underperformed, showing a one-year decline of 6.23% [5]. The share price currently stands at €705.68, significantly below its 52-week high of €1,110.09 [5].
China impact and future outlook
A key challenge facing ASML has been reduced demand from China, which represented nearly 50% of revenue this year but is expected to normalize to around 20% next year [1]. The company reported weak bookings in Q3 2024 [3]. Despite these headwinds, ASML maintains a stable financial structure with a debt-to-equity ratio of 29.1% [5][6], and analysts suggest a stock split might become more likely if shares exceed $1,000 again [3].