ASML and Corning Offer Strong Support for These Three Holdings

As we wait for the Fed and the post-market close barrage of earnings reports from our holdings, let’s walk through comments from ASML ASML as well as more from Corning GLW.

What we see brings additional layers of support for our holdings in Applied Materials AMAT, Marvell MRVL and Universal Display OLED.

ASML and AI Demand

As we saw early on Wednesday morning, ASML reported December quarter revenue climbed 28.0% year over year to €9.26 billion, nicely ahead of the €9.06 billion consensus. Quarterly net bookings for the quarter accelerated to €7.1 billion from €2.6 billion in the September quarter, giving ASML ample visibility through 2025 and into 2026. In terms of its outlook, ASML delivered stronger March quarter revenue guidance of €7.5 billion to €8.0 billion compared to the €7.21 billion Wall Street was looking for. ASML also reiterated its 2025 revenue forecast of €30 billion to €35 billion compared to the €28.3 billion delivered in 2024.

The midpoint of that 2025 revenue forecast matches the 2025 semiconductor capital equipment forecast for trade group SEMI which calls for total semiconductor manufacturing equipment sales to reach $131 billion this year, up 16%. SEMI also sees another year-over-year increase in 2026 to $139 billion.

Returning to ASML’s 2025 revenue forecast, the key driver identified by the management team is, no surprise, AI demand. And as that adoption scales, driving greater demand for chips ASML sees it creating a 2030 revenue opportunity between €44 billion and €60 billion.

We see a rather wide gap in that range, and it will hinge upon many factors, but when we look not at the range of figures but the trajectory of that long-term forecast it matches our thought that rising chip demand will tighten existing chip capacity driving demand for new equipment. That has been one of the components behind our Applied Materials thesis. The other has been global chip capacity re-shoring, which should start to kick in as CHIPs Act and other awards in 2024 matriculate.

Following Up on Corning’s Earnings Call

While we had hoped to learn more about Corning’s Specialty Materials segment and smartphone demand, understandably, the earnings call focused far more on Corning’s Optical Communications and the 51% year-over-year growth it posted in the December quarter. Management clarified that growth was largely led by the enterprise business, which was up about 50% in 2024 compared to 2023, with the majority of that growth coming from the generative AI data center space.

Corning also shared that Lumen Technologies LUMN reserved 10% of Corning’s global fiber capacity for each of the next two years. It also touched on expanding fiber footprints at Verizon VZ and AT&T T, which should improve deployment for Corning’s carrier business this year. During its earnings call this morning, T-Mobile USA TMUS shared its 2025 capital spending will be about $9.5 billion compared to $8.8 billion last year. All told, these are very favorable data points for Marvell’s Enterprise networking and carrier infrastructure segments.

Corning did discuss its Display Technologies business, which largely serves the flat panel display markets for televisions, notebook computers, desktop monitors, tablets and handheld devices. Revenue for this segment rose 12% compared to year-ago levels in the December quarter and shared it sees further gains ahead as average screen sizes grow about one inch per year. That reinforces similar comments made when LG Display LPL reported its December quarter results a few weeks ago.

We see that increasing screen size driving incremental demand at Universal Display but suspect it reflects larger TV screen sizes and more foldable models across smartphones and tablets.

We expect more color on Corning’s 2025 outlook at its March 18 Investor Day.

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At the time of publication, TheStreet Pro Portfolio was long AMAT, MRVL and OLED.