Every Cloud Has a Silver Lining; We Recommend Investors Buy Shares of ASML and Besi

With global stocks declining sharply due to the possibility of a US recession, the decline among semiconductor firms like wide-moat ASML and narrow-moat Besi has been particularly pronounced. We believe this a rare opportunity to buy shares of two exceptional firms, with competitive advantages and sound operations management. ASML and Besi offer a 28% and 20% upside to our EUR 900 and EUR 120 fair value estimates, respectively. In the case of a global recession, we expect both firms will remain profitable through the cycle given their assembly business model, which provides cost flexibility during periods of lower demand. Our 2025 EPS estimates for both companies are more conservative than PitchBook consensus estimates as of early July.