ASML Can't Keep Up With 2027 or 2028 Demand. Is It the Best AI Stock to Buy Now?
2026-10-16 13:30
•Daniel Foelber •The Motley Fool
••••• •• Axe Cap view
ASML’s Supply Crunch Signals AI Chip Boom, But What About SA?
ASML’s robust demand for AI chip-making gear shows strong tech trends, yet South African investors should focus on USD/ZAR exposure over direct JSE plays.
ASML’s latest results make clear that the AI chip boom isn’t slowing. Their advanced lithography machines are critical for next-gen semiconductors, driving record revenues and margins. But they’re struggling to keep up with demand, even with planned production hikes through 2027 and 2028. This bottleneck means ASML holds powerful pricing leverage for years ahead. Yet, South African investors face a challenge: there’s no direct local stock tying into this semiconductor surge. Instead, the clearest impact here is through the rand. Strong global tech demand tends to lift risk appetite and can support a stronger rand against the dollar when capital flows towards emerging markets. That said, if global growth falters or US tech stocks sell off aggressively, the rand could weaken instead. For now, watching USD/ZAR offers the most actionable angle to ride this theme locally. this is just our opinion and not financial advice
I’d watch USD/ZAR for strength as global tech investment firms lean into AI hardware demand. Avoid direct JSE tech stocks tied to this theme — Naspers and Prosus don’t have clear exposure here. Instead, consider South African exporters sensitive to a stronger rand, like Barloworld or Motus if the currency gains traction.
- USD/ZAR
- Barloworld
- Slowing global tech demand hits semiconductor capex
- US dollar rally pressures emerging market currencies
6/10
ASML reported record Q3 2026 results with 11.7 billion euros in revenue and 57.5% gross margins, beating guidance. The semiconductor equipment maker faces supply constraints as demand for AI chip manufacturing equipment outpaces production capacity. Management indicated that even planned 30% production increases for 2027-2028 may be insufficient to meet customer demand, signaling strong pricing power and long-term growth potential in EUV lithography systems.
Our take is based on reporting first published by The Motley Fool.