Prediction: After Micron and AMD, This Will Be the Next Tech Stock to Join the $1 Trillion Club

The tech assemblage present makes up 35% of the S&P 500. And a large crushed for that attraction is the increasing fig of tech stocks with monolithic marketplace caps.

There are 11 companies with marketplace caps implicit $1 trillion, and 5 of them are U.S. tech stocks. Micron Technology officially joined the $1 trillion nine connected May 26, portion Eli Lilly, Walmart, and Samsung Electronics person each been successful the nine but are conscionable beneath the threshold astatine the clip of this writing.

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With a marketplace headdress of $808 billion, Advanced Micro Devices volition astir apt beryllium the adjacent tech banal to articulation the $1 trillion club. Behind AMD is ASML (NASDAQ: ASML) astatine $616 cardinal and Intel at $612 billion.

Here's wherefore ASML has the clearest way toward becoming the adjacent tech banal to articulation the $1 trillion nine and wherefore it's a large bargain now.

ASML is up of the AI curve

ASML has softly go Europe's astir invaluable institution and is present worthy much than treble the marketplace headdress of second-place LVMH. ASML is besides the astir invaluable semiconductor instrumentality institution successful the world, up of Lam Research, with a $399 cardinal marketplace cap; Applied Materials, astatine $356 billion; and KLA, astatine $256 billion.

ASML has a virtual monopoly connected utmost ultraviolet (EUV) lithography machines, whereas Lam Research and Applied Materials vie successful deposition, etching, and polishing equipment, and KLA dominates the process power market.

Many modern spot manufacturing processes usage debased numerical aperture (Low-NA) EUV machines, but next-generation chips for artificial quality (AI) workloads volition trust connected ASML High-NA EUV machines. The exertion is truthful new, not to notation incredibly expensive, that ASML is lone selling 1 oregon 2 High-NA machines per quarter.

High-NA is conscionable getting started, but low-NA EUV is successful afloat swing, arsenic ASML's EUV income (High-NA positive Low-NA) are present astir treble non-EUV sales. However, much than fractional of ASML's gross inactive comes from general-purpose, little precocious heavy ultraviolet income positive services connected its installed basal of existing instrumentality successful the field.

Going beyond the information halfway

ASML is simply a catch-all mode to put successful AI alternatively than choosing betwixt customized spot and AI networking companies specified arsenic Nvidia oregon Broadcom, representation giants specified arsenic Micron versus Samsung Electronics, oregon unreality computing titans specified arsenic Amazon, Microsoft, oregon Alphabet.