GenInnov has ASML in the portfolio. We are not quarterly result investors, but everything demands a review when a stock falls 15% on a result. This note is not to peddle the stock or provide a forecast but to provide a glimpse of analysis possible with GenAI and conclusions you are unlikely to find in standard media or analyst reports. We do not intend to write reports on such events in the future—the idea is to discuss how GenAI will likely aid the investment process for everyone, including those of us who are not data scientists.

The analysis shown below was done in less than an hour. It was done by providing our favorite LLMs with the data we trusted, a simple ratio calculation and a chart done in Excel, and questions like Could this be white noise?  Unlike most analysts, our models were categorical in the answer: one cannot read much into the data point by itself. Of course, with additional contexts of China restrictions, etc., the answer is nuanced, but as we said, the idea is not to discuss ASML but to show how the world of analysis is likely to change.

After downloading the historic New Order Data, we calculated a simple ratio of the latest quarter's order to the average of the last four quarters' orders. The idea was to see if the latest data point was an outlier. A simple chart of this is below. We asked our GenAI model to do a white noise analysis on the data, and it confirmed our visual conclusion: ASML's orders are inherently lumpy. Large swings in this metric are not uncommon, and the latest decline, while significant, falls within the range of historical fluctuations.

The following summary from long model replies is only for the statistically oriented. Our LLMs – on a simple query to perform the white noise analysis – said that the series has

• a lag one autocorrelation of only 0.21, less than twice the standard error of 0.3, indicating little autocorrelation
• Clear Ljung-Box result that could not reject the hypothesis of no white noise
• And more traditional Z-Score of -1.2 for the latest data point, making it statistically non-significant at a 95% confidence level for such a series

Of course, these are mere numbers. Combining the statistical analysis with our knowledge and understanding of ASML can give us a more nuanced and informed perspective. We know that ASML operates in a cyclical industry, with long lead times and large, infrequent orders. The company also enjoys a near-monopoly in leading-edge lithography technology, essential for producing the most advanced chips. Furthermore, we are aware of the global push to increase semiconductor manufacturing capacity, driven by factors such as national security concerns and the rise of artificial intelligence.

Considering all this, the recent decline in ASML's orders could be a temporary blip rather than a sign of prolonged weakness. The company's strong backlog, dominant market position, and favorable industry dynamics all point to continued growth in the years to come. Of course, there are risks, such as the ongoing trade tensions between the US and China.

It's crucial to reiterate that the aim here is not to discuss our views on a company in our portfolio. This is just one example of how GenAI is democratizing investment analysis, helping investors make better decisions by providing access to sophisticated analysis and insights that were previously out of reach. As GenAI continues to evolve, it will play an increasingly important role in the investment process, empowering investors of all levels to make more informed decisions and be part of this progressive movement.