What happened

Technology stocks, semiconductors in particular, were under pressure in recent weeks as chances of an economic recession increased. Shares of chip fab equipment company ASML Holding (ASML -0.73%) fell 15% in June, according to data from S&P Global Market Intelligence. This compares to a 1.8% decline for the Nasdaq Composite and an 8.4% decline for the S&P 500 index in the month -- capping off the worst first half of a year since 1970.  

So what

Stocks related to chip design and manufacture were hit especially hard in June. After two years of heavy spending on stay-at-home and work-from-home electronics purchases, reports are mounting that the global consumer is tapping the brakes. Skyrocketing inflation isn't helping, and the U.S. Federal Reserve's aggressive interest rate hikes aimed at taming out-of-control commodity prices is casting shade on growth prospects for many businesses too. 

That doesn't mean all businesses are in trouble, though. ASML provides EUV (extreme ultraviolet) lithography equipment that helps chipmakers manufacture some of the most advanced semiconductors out there. Given ongoing strong demand for high-end computer chips in cloud computing and AI, demand for the Dutch company's equipment isn't likely to dry up anytime soon. In fact, with use of AI and the cloud poised to be a top priority in the business world for the rest of the 2020s, ASML's woes are likely to be relatively short lived.

Still, the plethora of economic concerns has investors questioning paying up for high-growth but high-priced stocks (at least, what were high-priced stocks when 2022 started) like ASML right now.  

Now what

Also positive for ASML is that demand for its lithography machines remains higher than current production capacity and supply chains will allow for. Any delay in shipping completed units will just be pushed into 2023 and beyond. This is likely to be a steady growth story for many years to come.

The question shareholders are now faced with is whether ASML stock (down 44% so far in 2022) is now a value given present market conditions. Shares trade for 15 times trailing-12-month free cash flow and 26 times expected current-year earnings. This in part reflects speed bumps the company is facing. But if you're looking for a broad-based play on the growing importance of the semiconductor industry, ASML Holding is a fantastic place to start.