Some big-name semiconductor stocks are due to report their latest quarterly earnings results this week. Undoubtedly, the numbers and outlook could determine the trajectory of the semiconductor industry, the tech sector, and perhaps even the entire stock market. Indeed, many market participants will be tuning in to the results, carefully considering any hints of what to expect from artificial intelligence (AI) demand going into the new year.

I wouldn’t go as far as to say next week’s slate of AI chip earnings will be make or break for the AI trade as well as know it. However, over the nearer term, anything short of an upbeat outlook and forecast could set the stage for a wave of volatility in the second half of October.

Either way, investors should have a game plan, regardless of how this week’s numbers stack up to the estimates. In any case, here are two semiconductor firms worth watching as they look to report this week.

Key Points About This Article

• ASML and Taiwan Semiconductor are poised to pull the curtain on their earnings this week. It’s sure to impact the tech scene and perhaps the whole market.
• Both stocks look quite cheap, even if expectations ahead are a tad on the high side. Perhaps buying before and after the quarter is a good move.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

ASML

On Wednesday morning, the Dutch photolithography system maker will report its latest results. With the stock going into the reveal in a somewhat fragile state — ASML (NASDAQ:ASML) stock is down close to 24% from its early-July all-time high.

That said, investors seeking deep value and upside in the semi equipment space may wish to punch their tickets before the results come due, as it’s likely the number could move the needle in a big way on the broader basket of AI stocks. For its quarter ending September, the analyst consensus is calling for earnings per share (EPS) of $5.27, slightly ahead of last year’s $5.23.

Much of the recent weakness can be attributed to export restrictions imposed by the Netherlands. Undoubtedly, some new restrictions on chip tools will not bode well for the firm in the near term. However, it’s still the only game in town for many firms that depend on its equipment to produce new chips.

Additionally, a semi equipment spending slowdown may be a concern for some, especially as firms look to take a breather after the first big AI surge.

In any case, the bad news may already be overly baked into the stock right here, at least according to some analysts who view the stock as a buy on weakness. At 25.9 times forward price-to-earnings (P/E), ASML is a cheap semiconductor equipment maker that often gets overshadowed by many of its clients.

Though I have no idea if ASML will hit the mark come earnings this Wednesday, I do think it makes sense to buy a half position here with the intention of buying the other half after the numbers come out.

Taiwan Semiconductor

Taiwan Semiconductor (NYSE:TSM) is another influential semiconductor firm poised to make waves when it reports before Thursday’s U.S. market opening. For the quarter, analysts expect EPS of $1.74, much higher than the $1.29 posted last year. It’s tough to tell if TSM will impress, given its stock has already done so going into next week’s reveal. At writing, TSM shares are flirting with new highs after rising close to 88% year to date.

Undoubtedly, expectations will be high as the firm continues doing big business for GPU giant Nvidia (NASDAQ:NVDA). With TSM stock trading at 22.7 times forward P/E, the foundry king remains modestly valued, with enough growth drivers in the tank to fuel a run to new highs in the coming weeks and months. Like with ASML, investors may wish to buy before and after the numbers come out. Playing quarters can be a tough game, but playing the long game with a name like Taiwan Semi could prove incredibly rewarding.

All considered, Taiwan Semi looks in good shape, heading into its earnings this week. With the AI boom in full swing, now doesn’t seem like the best time to be a taker of profits.

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