Analyst: ASML, TSMC Earnings to Set Tone for Chip Sector

A B. Riley analyst is framing this week's second-quarter earnings reports from ASML (AS:ASML) and TSMC (TW:2330) as "tone-setting" for the entire semiconductor and semiconductor capital equipment sector, arguing that an $880 billion surge in AI infrastructure spending has arrived roughly 12 months ahead of the firm's prior forecasts.

Rating Change

The report does not mention any change in rating or price target for either stock, but emphasizes the importance of the upcoming results in setting the sector's direction.

Analyst's Rationale

The analyst believes ASML and TSMC's results will provide a clear signal on the strength of AI-related semiconductor demand. The early surge in AI infrastructure spending suggests these companies may see stronger-than-expected demand.

Context

ASML is the exclusive supplier of extreme ultraviolet (EUV) lithography machines needed for advanced chip manufacturing, while TSMC is the world's largest semiconductor foundry. Both are considered bellwethers for the sector.

What to Make of It

While not a buy or sell recommendation, the note suggests investors should watch ASML and TSMC's results closely as they could set the tone for the semiconductor sector in the near term.