Investing.com -- Shares of ASM International (AS:ASMI) jumped over 5% on Wednesday after the company reported strong results, and analysts at BofA Securities have elevated it to their top pick within the European semiconductor capital equipment sector.
The decision reflects the strong results ASMI delivered, including higher-than-expected orders and a confident upward revision of its 2025 revenue forecast.
Analysts at BofA are maintaining a “buy” rating for ASMI with a price objective of €746.
ASMI’s third quarter results surpassed expectations on several fronts. The company reported revenues of €778.6 million, a 1.7% increase over the Visible Alpha consensus estimate.
Orders were particularly robust, coming in at €815.3 million, significantly higher than the BofA forecast of €770.6 million.
These results were driven by rising demand for next-generation technologies such as Gate-All-Around (GAA) transistors and high-bandwidth memory (HBM), signaling ASMI’s strong alignment with industry trends.
Gross margins also improved, reaching 49.4%, reflecting both a favorable product mix and stronger-than-anticipated sales from China.
Despite some headwinds in the Chinese market, ASMI managed to raise its full-year 2025 revenue guidance to a range of €3.2 to 3.6 billion, an upgrade from the previous forecast of €3.0 to 3.6 billion.
“We are pleasantly surprised by the figures….While cons. had already been at €3.6bn for 2025, we believe that the buy-side had expected at least a minor cut to the previous guidance - positive surprise, in our view,” said analysts from Stifel in a note.
While the company expects China’s contribution to decline in the second half of 2025, this adjustment has not altered consensus estimates.
“We would specifically note that the co. has raised the bottom end of the guided range but not lowered the top end of the range. Thus, while to be cautious some estimates may still decline for ‘25, we see this guidance as positive and an indication that ASM International is not seeing a slowdown,” said analysts from J.P. Morgan in a note.
The cyclical and secular growth drivers—such as the adoption of silicon carbide epitaxy tools and advancements in semiconductor manufacturing—further reinforce ASMI’s position.
ASMI’s ability to maintain operational strength during uncertain times, particularly given recent challenges in the global semiconductor market, stood out to BofA analysts.
With other major industry players like ASML (AS:ASML) adjusting expectations downward, ASMI’s consistent performance offers reassurance to investors.
Additionally, the company’s focus on key areas such as epitaxy and atomic layer deposition tools positions it to capitalize on long-term trends, including the shrinking of semiconductor nodes and the complexity of modern chip architectures.
“We continue to like ASM’s positioning for the current cycle, particularly the atomic layer deposition (ALD) exposure into the gate all-around (GAA) transition. With the 2025 guidance adjustment likely to be taken into account, we remove our Short-term Downside view,” said analysts at Citi Research in a note.