Morgan Stanley Touts ASML, ASMI Ahead of Q4 Earnings

Analyst Highlights Key Chip Stocks

Morgan Stanley has identified ASML and ASMI as its top picks within the European semiconductor sector heading into the Q4 earnings season. The investment bank anticipates a focus on capital spending visibility and order momentum for the industry.

Semiconductor Sector Outlook

The firm's preference is for wafer fabrication equipment, or WFE, manufacturers over other sub-sectors. This positive outlook is driven by continued strength and expected investment in both the memory chip and foundry segments, which are critical components of the global technology supply chain.

Impact on European Equities

This endorsement from a major Wall Street firm could positively influence investor sentiment towards ASML and ASMI. The analysis suggests these companies are well-positioned to benefit from sustained capital expenditure cycles in the semiconductor industry, with ASML scheduled to kick off its earnings report on January 28.

Forward-Looking Summary

Analysts led by Lee Simpson state that strong fundamentals in memory and foundry capex underpin their recommendations. The upcoming earnings reports will be closely watched for confirmation of this investment trend and its impact on equipment orders.

FAQ

Q: Which European semiconductor stocks does Morgan Stanley recommend?
A: Morgan Stanley's top picks are ASML and ASMI.

Q: Why are these chip stocks favored?
A: They are expected to benefit from strong investment in the memory and foundry sectors, as they are leading wafer fabrication equipment manufacturers.

Source: Investing.com