u/Wooden_Fondant_703 5.0 2 ideas

ASML beat Q1 estimates and raised guidance, but the stock dropped as China sales fell from 36% to 19% of total revenue. To meet 2026 guidance, non-China sales must grow ~39%. Currently, AI-driven memory demand (South Korea) is surging to offset the China decline, making ASML a real-time test of AI demand vs. geopolitical losses. The stock is a critical watch at 34x forward earnings to see if AI demand can sustainably replace the massive "China-shaped hole" in their revenue. The bipartisan MATCH Act could ban DUV exports, dropping China revenue to zero; AI/memory demand could cool before 2030 targets are reached.

A reverse DCF shows INTC's $62 price implies ~16% annual EBITDA growth for 10 years, requiring revenue to more than double, margins to expand drastically, and its foundry business to grow 65x. This growth profile is priced as certain, but Intel's recent history shows -1.5% revenue CAGR, negative FCF, and massive foundry losses, creating a large gap between price and probable fundamentals. The stock is overvalued, front-running a perfect execution of a difficult turnaround. The risk/reward is poor at this price. Intel successfully executes its 18A node, secures major external foundry customers (like Terafab), achieves government-subsidized margin expansion, and exceeds growth expectations.