The Quiet Winners of Europe’s AI Chip Cycle

Three very different ways to own the semiconductor capex and power cycle

One is the lithography choke point, one enables compound semiconductors, one monetizes electrification and power demand.

If you want real exposure to the “AI buildout,” you eventually end up in the plumbing, not the headlines.

The plumbing is not one trade. It’s a stack.

ASML sits at the front end of leading edge fabrication. Aixtron sits in the compound semiconductor tooling lane that powers new generations of power and RF devices. Infineon sits in the chips that convert and control electricity across EVs, industrial systems, renewables, and increasingly data centers.

All three matter. They just reward different entry discipline.

Key Takeaways

ASML (ASML US)
Best-in-class moat. Trend is strong and accelerating after a major breakout. The smart trade is to avoid chasing candles and instead buy defined pullbacks into support, then let Fibonacci extensions do the work on targets.

Aixtron (AIXA XETR)
Higher volatility, smaller float, more cycle sensitivity. Still, the chart structure is constructive after a strong impulse. The best plan is to buy a controlled retrace into Fibonacci support rather than buying right under recent highs.

Infineon (IFX XETR)
Not “AI compute,” but “AI electricity.” Strong momentum after a breakout. Risk is paying up into extended RSI. Best entries are pullbacks into moving average support, with a clean breakout add only if price consolidates and holds.

ASML (ASML US)

The bottleneck technology that quietly taxes every advanced chip.

ASML is the closest thing public markets have to a “non optional” supplier for leading edge logic. If the world wants more advanced compute, it needs more lithography capacity and upgrades. That’s why ASML tends to trade like a structural compounder, even though quarterly deliveries can be lumpy.

Business and backlog context

The economic engine is simple: very high value systems plus a growing installed base that drives services, upgrades, and software. That installed base element matters because it dampens cyclicality over time.

Recent results showed net bookings of about €5.4B, including €3.6B in EUV, with quarterly net sales around €7.5B and gross margin a touch above 51%.
Bookings are the heartbeat for ASML. When they stay elevated, the market pays up for forward visibility.

Fundamentals and financial health

On profitability, ASML continues to print “software-like” economics for an industrial business.

• Gross margin is running just above 51% (excellent for complex hardware).

• Operating leverage remains strong because the incremental gross profit dollars are meaningful once tool volumes stabilize.

  

Balance sheet quality is a key part of the story. ASML carries real financial flexibility, with a balance sheet that can fund heavy R&D, support working capital swings, and still return capital. The key point for investors is that ASML’s weaker cash flow quarters are often timing, not deterioration, because inventory and receivables move around with tool deliveries and acceptance cycles.

ASML is a high margin toll collector on the most important step in advanced chip manufacturing. The core risk is not business quality. It’s entry price and the path of the cycle.

Technical picture and what the levels mean

The trend is bullish across timeframes. The recent move is a classic impulse extension: price broke higher, held above rising moving averages, and pushed into Fibonacci extension zones.

Momentum and structure

• Daily RSI is elevated, which often signals strength, but also warns that chasing is a lower quality entry.

• MACD remains constructive, confirming trend, but late-stage momentum can mean pullbacks arrive fast.

Key levels (mapped to structure)

• 1,258 to 1,260: Major breakout retest zone. This was a key extension level previously, and now acts like “new support.” If price revisits it and holds, it often becomes the launchpad for the next leg.

• 1,240: Next support shelf. This is the kind of level that shows up when an impulse digests gains.

• 1,205 to 1,200: A deeper mean reversion band where buyers often step in if momentum cools.

• 1,151: A bigger trend support area tied to moving-average structure. If the market gets risk-off, this is where you want to see demand show up.

Upside Fibonacci targets

• 1,326: First major extension target. This is the “next logical magnet” if price holds above the breakout region.

• 1,347: Secondary extension objective in the same zone.

• Higher targets exist above this, but the first job is managing the trade into the 1,326 to 1,347 band before getting ambitious.

  

ASML is in a bull regime. The only mistake is paying the top tick of an impulse candle. The higher-probability play is buying pullbacks into defined support, then letting extensions guide exits.

Aixtron (AIXA XETR)

The quiet pick-and-shovel exposure to compound semiconductors.

Aixtron builds deposition equipment, best known for tools used in compound semiconductor production. In plain English: this is the tooling ecosystem for materials that matter in power, RF, and photonics.

That connects to the AI buildout indirectly but meaningfully. AI does not only need GPUs. It needs power efficiency, power conversion, and fast connectivity, and compound semiconductors are central to those upgrades.

Business, backlog, and cycle context

Aixtron is more cyclical than ASML, and the market treats it that way. Orders and guidance matter a lot because investors try to front-run the next equipment upturn.

Recently, the company posted quarterly revenue of about €163M, with a record order backlog around €558M, and reiterated its full-year outlook.
Backlog matters here because it is the clearest stabilizer when the market debates whether demand is “real” or “pushed out.”

Fundamentals and financial health

The financial profile is solid for a mid-cap equipment name, with a balance sheet that provides resilience in a choppy demand environment.

• The company has highlighted a strong balance sheet position, including an equity ratio around 84% and high liquidity.

• The headline risk is not leverage. It’s order timing and margin variability as the mix shifts.

  

The most important investor takeaway is this: Aixtron can look optically cheap or expensive depending on where you are in the orders cycle. That’s why we lean heavily on technical structure for entry discipline.

Aixtron is financially healthy, but more sensitive to the capex cycle. You want to be paid for that volatility by entering on pullbacks, not at the top of an impulse.

Technical picture and what the levels mean

Price is near 20 after a sharp run and some digestion under recent highs. This is often where strong names either build a base for continuation or retrace to reset momentum.

Key structure

• 21.30 to 21.55: Recent highs and the near-term ceiling. If price clears this cleanly, continuation is on the table.

• 19.20: The first meaningful Fibonacci retracement support of the latest major swing. This is where “healthy pullbacks” often stop.

• 17.80 to 17.40: Deeper retracement zone that lines up with key moving averages. This is the higher reward entry if the market gives it.

• 16.20: Larger trend support. A break below would change the character of the setup.

  

Upside extension targets

• 24.20: First extension objective if price breaks and holds above the highs.

• 27.80 to 28.00: Higher extension band if the cycle re-rates and momentum stays constructive.

  
  AIXA is bullish, but it is also the kind of chart that punishes FOMO. The best trades come from buying retracements into Fibonacci support.

Infineon (IFX XETR)

Not AI compute. AI power, electrification, and the hardware that converts electricity into performance.

Infineon is a leader in power semiconductors and automotive and industrial chips. The AI connection is straightforward: the more compute you deploy, the more power you must convert, regulate, protect, and optimize.

Data centers care about power efficiency. EVs care about power efficiency. Industrial automation cares about power efficiency. That’s Infineon’s lane.

Business and catalyst context

The company has been navigating a softer auto environment and inventory digestion, but it has also signaled improving momentum and is active in portfolio expansion.

Infineon lifted its FY revenue outlook recently, helped by currency effects and a less severe than feared first-quarter decline.
It also announced an acquisition of Marvell’s automotive Ethernet business for $2.5B, aiming to strengthen its automotive microcontroller platform.
For investors, this matters because it signals strategic focus on automotive connectivity and control, not just power devices.

Fundamentals and financial health

Infineon is not a small-cap story. It’s a scaled operator with meaningful end-market diversification.

• Management commentary and reporting have pointed to a stabilizing revenue path versus the prior downshift, with guidance adjustments reflecting improving visibility.

• The strategic push into automotive connectivity is designed to reinforce the quality of its automotive revenue base over time.

  

The biggest fundamental risk is cycle timing. When autos slow, Infineon slows. When inventories clear and industrial demand re-accelerates, Infineon’s operating leverage shows up.

IFX is a high-quality way to own electrification and power efficiency. The opportunity is real, but entries still matter because the stock can swing with macro and auto sentiment.

Technical picture and what the levels mean

Price is around 41.7, after a strong breakout. That’s bullish, but it also means your risk is not “is the trend up.” Your risk is “am I buying the part of the move where pullbacks are statistically likely.”

Key levels

• 42.20: Near-term resistance. If it clears and holds, the breakout remains in control.

• 38.60: First major support and moving-average magnet. This is the pullback zone that often offers the best risk-defined entry.

• 36.70: Next support shelf. If price loses 38.60, this is where you want to see buyers defend.

• 35.60 to 34.75: Larger trend support. A break below shifts the setup from “pullback in an uptrend” to “trend damage.”

  

  
  IFX is trending. The high-quality trade is buying a pullback into support. The lower-quality trade is buying at the highs and hoping.

Our Simple Trade Plan

Position Sizing

These are high-quality businesses, but they are not the same risk. Position size should reflect both business stability and chart structure.

• ASML deserves the largest allocation because of its monopoly-like position, balance sheet strength, and relatively shallow drawdowns in corrections.

• Aixtron should be sized smaller due to higher volatility and greater sensitivity to order cycles, even when the long-term setup is constructive.

• Infineon sits in between, with a solid balance sheet and diversified end markets, but more exposure to macro and automotive cycles.

As a rule of thumb, size positions so that a stop being hit does not materially impact your portfolio, and scale in across planned entry zones rather than committing all capital at once. The goal is not to be aggressive at the top, but to stay invested through cycles without being forced out by normal volatility.

ASML (ASML US)

Pullback entries (preferred)

• Entry A: 1,260 to 1,250 Breakout retest zone. You are buying the “new support” after a strong leg.

• Entry B: 1,240 to 1,230 Next support shelf. This is where corrective dips often stabilize.

• Entry C: 1,205 to 1,195 Deeper pullback, higher reward if it tags.

Breakout add: Daily close above 1,280, followed by holding that area on a retest.

Stop (keep it simple): Below 1,195 on a daily close, or more conservative. Below 1,151 if you’re positioning longer term and want to avoid getting wicked out.

Targets (scale out, do not guess tops)

• Target 1: 1,326 (first major Fibonacci extension)

• Target 2: 1,347 (secondary extension objective)

• Target 3: trail a stop under higher lows if momentum stays strong

  

Aixtron (AIXA XETR)

Pullback entries (preferred)

• Entry A: 19.30 to 19.00 First Fibonacci support. You’re buying a controlled reset, not a breakdown.

• Entry B: 17.80 to 17.40 Deeper retracement plus moving-average support. Better risk-reward.

• Entry C: 16.30 to 16.10 Last line of trend support. If it trades here, size smaller and demand confirmation.

Breakout entry (smaller size) Daily close above 21.55, then add only if it holds on a retest.

Stop: Below 16.00 on a daily close for pullback entries. If you enter on breakout, stop can be below 20.00 after confirmation.

Targets

• Target 1: 21.30 to 21.55 (retest highs if you bought pullback)

• Target 2: 24.20 (first extension)

• Target 3: 27.80 (higher extension band)

  

Infineon (IFX XETR)

Pullback entries (preferred)

• Entry A: 39.00 to 38.50 First moving-average support zone.

• Entry B: 36.90 to 36.40 Deeper support shelf if the pullback gets more serious.

• Entry C: 35.60 to 34.80 Larger trend support. Only buy if price stabilizes and momentum stops declining.

Breakout add (smaller size) Daily close above 42.20, followed by holding above 41.50 on a retest.

Stop: For Entry A, a clean stop is below 38.00 on a daily close. For deeper entries, stop can be below 34.70 on a daily close.

Targets

• Target 1: 42.20 (retest and first profit point if you bought pullback)

• Target 2: 45.00 (first psychological extension area)

• Target 3: 48.00 (next continuation objective, reassess there)

  

Bottom Line

These three names give you three different “AI-adjacent” exposures that investors often lump together.

ASML is the purest structural moat. It deserves premium treatment, but that’s exactly why you insist on pullback entries into support rather than chasing.

Aixtron is the volatility play on compound semiconductor tooling. It can outperform in the right part of the cycle, but only if you respect Fibonacci support and avoid buying right under resistance.

Infineon is the electrification and power efficiency lever. AI needs electricity as much as it needs compute. The chart is strong, but the best risk-reward still comes from letting price come back to moving-average support.

If you do one thing across all three, do this: define your entry zones, define your stop, and let the market prove continuation before you size up.

This article is for informational and educational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any security. All views expressed reflect personal analysis at the time of writing and may change as market conditions evolve. Investing in equities involves risk.