ASML Holding (ASML 4.05%) stock got a modest 1.6% bump on Monday, lost it all on Tuesday, but is up again even more on Wednesday -- 6.1% through 11:25 a.m. ET. And why?
It may surprise you to learn that I think the same thing that didn't get enough attention Monday is finally on investors' radar today: The SpaceX (SPCX +2.69%) IPO is going to be very good news for ASML.
Image source: Getty Images.
SpaceX is flush with cash now
SpaceX made history last week, both scoring a gigantic valuation (currently $2.5 trillion) and raising more than $80 billion in cash.
Now SpaceX must figure out how to deploy all this cash to keep the growth going. And here's the thing: According to Canadian private equity shop Lynx Equity, SpaceX will spend quite a lot of this cash on semiconductors.
Most investors think of SpaceX as a space company (I mean, it's right there in the name!) And yet, the gigantic tech company that IPO'ed last week is really much more of an AI stock, as SpaceX demonstrated just yesterday when it splashed out $60 billion in stock to buy Cursor.
NASDAQ: ASML
Key Data Points
What this means for ASML
As Lynx explains, AI companies buy lots of AI chips to first train and then deploy their large language models to answer questions. SpaceX can therefore be expected to spend a significant portion of its IPO proceeds on semiconductor chips.
In turn, companies like Nvidia (NVDA 1.39%) and Intel (INTC 5.61%) (or their third-party contractors), which sell those chips to SpaceX, can be expected to spend heavily on machines from ASML to make them.
This makes ASML a great way to play the SpaceX IPO phenomenon. And the best news of all? Even valued at just 18 sales, ASML stock is still 7x cheaper than SpaceX!
