ASML: Margins at Record Levels
ASML remains on course for records. The Dutch manufacturer of lithography systems for the chip industry once again exceeded market expectations with its third-quarter 2026 results. Revenue reached EUR 11.66 billion, and net profit came to just under EUR 5 billion (+136%). Gross margin reached a massive 57.5%. As ASML has a monopoly in this market, it benefits enormously from the construction of new chip factories, which are being built primarily in Asia and North America as a result of the AI boom.
ASML also aims to keep its gross margin high in the final quarter, targeting 57%. Demand for the next two years continues to exceed supply, and the company says it cannot meet all enquiries. Management is therefore currently examining whether to expand capacity by a further 30% in 2028.
ASML shares fell slightly on the figures. Apparently, the so-called whisper estimates had been a little higher still, particularly for the outlook. Although ASML remains on a growth trajectory, its share price now also reflects China’s catch-up. Reports repeatedly suggest that Chinese companies are no longer far behind the standard of ASML’s machines.
The outlook remains generally rosy, but the question remains: how long will the AI-driven boom last? The blows are getting closer in the sector. Moreover, more and more analysts are asking how LLM providers, such as Anthropic and OpenAI, intend to recoup their investments. ASML shares are trading about 15% below their June all-time high. With a market capitalisation of around USD 662 billion, ASML is anything but a bargain. If AI growth slows, ASML, as an equipment supplier, would likely feel the effects relatively early. For now, however, its balance sheet shows no signs of damage.
Almonty Industries: Double Bottom Formation and Upside Potential
At the end of July, a share in Almonty Industries cost just under USD 11. It then rose by around 40% within a few weeks. However, those gains have since been sold off. The share price is now back at just under USD 11 and could thus mark a double bottom. If a technical bottom forms here, the share price could rise again quickly.
Incidentally, nothing has changed for the worse operationally during this time. Almonty Industries continues to ramp up the Sangdong mine in South Korea. As CEO Lewis Black has written in his letter to shareholders, the first tungsten is ready for export. However, the focus is already on the second phase: expanding the mine. The company aims to double processing capacity to 1.2 million tonnes of ore next year. Almonty will then become the largest non-Chinese tungsten producer.
China currently controls around 80% of the global market, according to calculations by the US Geological Survey (USGS). Adding Russia and North Korea brings this proportion to around 95%. Tungsten is virtually irreplaceable in many goods, including aerospace, defence, the tool industry and medical technology. The material’s advantage lies in its extremely high melting point of 3422°C and its density, which is almost equal to that of gold. These characteristics make tungsten extremely scratch-resistant and hard, but brittle.
Because China currently controls the market, Almonty Industries plays a key role for the West. Competition is limited, and it will likely be a long time before other Western mines enter the market. Analysts remain optimistic about Almonty Industries’ shares. Investment bank Stifel set a price target of USD 25 in September, citing high tungsten prices. This would give the shares the potential to double. The current weakness could be overcome with the release of the Q3 figures. With Almonty having built up a cash position of around USD 1.2 billion, its first share buyback programme, worth USD 300 million, is already underway. Black said shares worth around USD 48 million have already been acquired.
Lynas Rare Earths: Shares Under Pressure
Rare earth stocks attracted considerable investor attention last year. The trade conflict between the US and China had escalated once again, and Washington made clear its intention to establish an independent Western supply chain for critical raw materials. The aim is to gradually reduce dependence on China.
Investors were able to generate substantial returns from rare earth stocks in 2025. This year, however, sentiment has turned. Euphoria has given way to disillusionment. Just a few days ago, the VanEck Rare Earth, Strategic Metals & Lithium ETF hit a new 52-week low. Since its peak in March, the broadly diversified index has lost nearly half its value.
Lynas Rare Earths hit its yearly high in April. Since then, the stock has also lost almost half its value. Its market capitalisation has shrunk from more than USD 20 billion to around USD 11.65 billion. Operationally, the largest Western producer of rare earths is benefiting from higher market prices. Revenue increased by 75% in the most recent financial year, while EBITDA more than tripled (year ended June 30). The key question is how management will deploy its cash reserves, which have now reached USD 1.2 billion. Costly acquisitions appear unlikely. Earlier this month, the company announced the acquisition of Meteoric Resources, a deal financed entirely with shares.
Market speculation and stock forum chatter centre on a larger deal. For example, major shareholder Gina Rinehart could seek a takeover through her resources company Hancock Prospecting or push for a merger with the US company MP Materials, in which she also holds a stake. Mining giants BHP and Rio Tinto are also being mentioned as potential buyers. With Lynas’s valuation having fallen significantly, these scenarios could actually become reality.
Conclusion
With Lynas Rare Earths, investors are betting on the comeback of rare earth stocks. Speculation about a takeover of the Australian company persists even at this share price level. At Almonty Industries, the first rewards from the Sangdong tungsten mine will be reaped this year. The Q3 figures could provide the shares with renewed momentum. High margins and a near-monopoly position make ASML an interesting investment case. However, the chip boom will eventually end, and the Dutch equipment supplier is likely to be among the first to feel it.
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