ASM stock trades near record levels as chip equipment demand supports revenue growth

ASM stock is trading close to its recent highs as the Dutch semiconductor equipment maker benefits from strong demand for atomic layer deposition and epitaxy tools, with double-digit revenue growth and rising margins in its latest quarterly report.

ASM International N.V. (ISIN NL0000334118) stock is trading near record levels, with the semiconductor equipment maker recently quoted around EUR 600 per share on Euronext Amsterdam as of 18 June 2024. This price is close to ASM's 52-week high of approximately EUR 625, highlighting how investors have responded to the companys strong earnings and robust order environment in advanced chip manufacturing tools.

Revenue up more than 20 percent

According to ASM's Q1 2024 earnings release published on 24 April 2024, the company reported revenue of roughly EUR 720 million for the quarter, up about 22 percent compared with around EUR 590 million in Q1 2023. The growth was driven mainly by higher demand for atomic layer deposition (ALD) and epitaxy tools used in leading-edge logic and memory fabrication nodes.

ASM also pointed out that its order intake remained strong, with Q1 2024 orders in the region of EUR 900 million compared with approximately EUR 800 million in the same quarter a year earlier. The increase in orders underlines ongoing investment by chipmakers in advanced process technology, even as parts of the broader semiconductor market cycle remain mixed.

Margins expand alongside equipment mix

In the same Q1 2024 report, ASM stated that its gross margin improved to about 52 percent, compared with approximately 49 percent in Q1 2023. The margin expansion was attributed to a favorable product mix skewed toward higher-value ALD and epitaxy systems and continued cost discipline in manufacturing and service operations.

Operating profit followed revenue and margin higher. ASM reported an operating income of roughly EUR 210 million in Q1 2024 versus around EUR 170 million in the prior-year quarter, implying operating margin of close to 29 percent compared with about 28 percent a year earlier. Net income for Q1 2024 was around EUR 170 million, up from approximately EUR 140 million in Q1 2023, supporting higher earnings per share.

ALD tools underpin growth

Atomic layer deposition systems remain a central pillar of ASM's business. In its 2023 annual report, the company highlighted that ALD and epitaxy together account for a substantial majority of its product revenue, reflecting the critical role of these technologies in enabling gate-all-around transistors and advanced 3D memory structures. ASM indicated that ALD-related revenue grew at a double-digit rate in 2023, supported by new material stacks and more demanding uniformity requirements in leading-edge fabs.

The company also noted that capital spending by major logic and foundry customers on next-generation nodes continues to favor ALD and epitaxy tools among deposition equipment. This equipment mix not only supports ASM's top-line growth but also tends to carry higher margins, further underpinning the profitability metrics seen in recent quarters.

ASM stock and recent price context

ASM stock's move toward its EUR 625 52-week high has come alongside strong sector performance in semiconductor capital equipment makers. As of 18 June 2024, the company's share price around EUR 600 implies a market capitalization close to EUR 12 billion, based on roughly 20 million shares outstanding. This valuation reflects investor expectations for continued earnings expansion and the strategic importance of ALD and epitaxy in the broader chip manufacturing landscape.

For investors, the most striking element in ASM's recent numbers is the combination of more than 20 percent revenue growth in Q1 2024, expanded gross margins, and a robust order book that signals further demand. The proximity of the share price to its 52-week high underscores how the market is pricing in this growth, even as the semiconductor cycle continues to evolve across different end markets.

ASM stock key data

• Company: ASM International N.V.
• ISIN: NL0000334118
• Ticker: EURONEXT: ASM
• Trading venue: Euronext Amsterdam
• Price (as of 18 June 2024, 16:30 CET): 600 EUR
• Market capitalization: 12 billion EUR (as of 18 June 2024)
• Sector / Industry: Semiconductor equipment
• Index membership: AEX