ASM International

ASMI today announced that Q4 bookings stood at approximately €800 million, above the prior indication, and Q4 revenue stood at €698 million above the guided range of €630-660 million. 

The positive bookings were driven by a rebound in orders from China as well as bookings in the advanced logic/foundry segment. 

We expect to see a positive reaction in the share price today. 

From our valuation perspective, ASM International appears to be the least overvalued, but nonetheless, with growth of 9% and 17% in the next two years along with a CAGR of 15% in sales and improving margins, we see the shares overvalued on a fundamentals basis.

Following TSMC’s results last week, strong momentum continues for the sector, particularly for equipment suppliers. However, we believe the sector is now more than fairly valued. First, valuations remain stretched; for instance, ASMI trades at a P/E of 40x for 2026 and 32.4x for 2027. Second, questions persist regarding the underlying effective demand for AI and the willingness of end-users to pay for these services. This is underscored by OpenAI’s recent announcement that it will introduce advertising to generate additional revenue, suggesting that organic effective demand (backed by actual payments) is insufficient at this stage.

While there is a strong case that AI will eventually revolutionize business and achieve ubiquity, the path to adoption may be bumpy. Ultimately, while the term "bubble" may not yet be warranted, the risk of disappointment over the next few years is real and could trigger a substantial contraction in valuation multiples.