ASML overtakes LVMH on AI boom to become Europe's second most valuable firm

By Louis Goss

ASML Holding, the Dutch firm that makes the machines used to manufacture microchips, has overtaken luxury giant LVMH Moët Hennessy Louis Vuitton to become Europe's second most valuable company behind Ozempic maker Novo Nordisk.

Shares in ASML (NL:ASML) (ASML) have surged 9% since markets opened on Wednesday on the back of a rally in Nvidia's share price that saw the California chip designer overtake Apple to become the second most valuable company in the world, worth more than $3 trillion.

ASML's own market capitalization was lifted to heights of EUR384 billion ($417 billion), making it Europe's second most valuable company, ahead of LVMH at EUR381 billion, but behind Danish pharmaceutical giant Novo Nordisk which is worth EUR425 billion.

ASML's share price was also lifted by news the Veldhoven company is on course to deliver its newest 'High NA' chip making machines, which cost around EUR350 million each, to customers Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung this year.

TSMC, the world's top manufacturer of the most advanced semiconductors, is a major supplier of chips to Nvidia (NVDA) and Apple (AAPL). ASML's 'High NA' machines are able to imprint lines on chips that are just 8 nanometers thick - rates 1.7 times smaller than the next most-advanced tech.

Analysts at Bank of America have said they now believe ASML could generate EUR40 billion in revenue in the full-year 2025, on the back of surging demand for its lithography machines as a result of the artificial intelligence boom.

ASML generated EUR27.6 billion in revenue in the full-year 2023, up 30% year-on-year, as the only company in the world that manufactures the multi-million-euro machines needed to make the most advanced semiconductors used for AI.

Bank of America's analysts, led by Didier Scemama, said the pace of investment currently being pursued by cloud computing companies and AI infrastructure businesses will drive up demand for ASML's cutting-edge machines.

Novo Nordisk (DK:NOVO.B) overtook LVMH to become Europe's most valuable company in September 2023 on the back of the successes of its GLP-1 weight loss drugs Ozempic and Wegovy. Novo Nordisk shares were up 3% on Thursday having increased 72% over the past 12 months.

LVMH (FR:MC) shares were up 1% on Thursday having increased 6% over the past year. TSMC (TW:2330) shares were up 5% on Thursday having advanced 60% over the previous year.

-Louis Goss

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06-06-24 0651ET

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