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Tech and innovation remain the cornerstones of growth, and the Nasdaq-100 Index ($IUXX) serves as a hub for some of the most transformative companies. Despite recent market volatility driven by the Federal Open Market Committee's (FOMC) revised rate-cut projections for the upcoming year, opportunities abound within this elite index, particularly for stocks that have yet to fully capitalize on their potential.
And ASML Holding N.V. (ASML), Regeneron Pharmaceuticals, Inc. (REGN), and Microchip Technology Incorporated (MCHP) stand out as three such compelling opportunities. Despite trailing the broader market over the past year, market watchers remain optimistic about these three Nasdaq-100 names, with consensus price targets pointing to an impressive upside ranging from 25% to 53%. So, here’s a closer look at these three stocks.
Nasdaq-100 Stock #1: ASML Holding
Netherlands-based ASML Holding N.V. (ASML) is a powerhouse in the semiconductor industry, providing cutting-edge hardware, software, and services that empower chipmakers to mass-produce intricate integrated circuits. Partnering with industry leaders, ASML helps drive the development of more affordable, powerful, and energy-efficient microchips that fuel groundbreaking innovations in healthcare, energy, mobility, and agriculture.
However, valued at around $283.5 billion by market cap, shares of this chip giant are in negative territory, posting a decline of roughly 4.9% over the past year, lagging behind the broader S&P 500 Index’s ($SPX) 26% return and IUXX’s 28.2% gain during the same time frame.
On Nov. 7, ASML paid an interim dividend of $1.64 per ordinary share, reflecting its commitment to rewarding shareholders. With a forward annualized dividend of $6.62 per share, the company offers a modest yield of 0.9%, highlighting a steady income stream amid its growth-focused strategies.
The company dropped its third-quarter earnings results on Oct.15, which revealed better-than-expected top and bottom-line figures. Total net sales and EPS for the quarter jumped 19.6% and 31.7% sequentially to $8.2 billion and $5.80, respectively. Despite strong growth potential in artificial intelligence (AI), the company noted that other market segments are recovering more slowly than anticipated, leading to cautious customer behavior.
CEO Christophe Fouquet highlighted, “Regarding Logic, the competitive foundry dynamics have resulted in a slower ramp of new nodes at certain customers, leading to several fab push outs and resulting changes in litho demand timing, in particular EUV. In Memory, we see limited capacity additions, with the focus still on technology transitions supporting the HBM and DDR5 AI-related demand.”
Looking ahead, ASML expects Q4 net sales to range between €8.8 billion ($9.2 billion) and €9.2 billion ($9.6 billion), with a gross margin between 49% and 50%. For fiscal 2024, total net sales are projected at €28 billion ($29.2 billion), while for 2025, sales are anticipated to land between €30 billion ($31.3 billion) and €35 billion ($36.5 billion). Meanwhile, analysts tracking ASML Holding project the company’s profit to dip 4.5% year over year in fiscal 2024 before growing a notable 22.5% in fiscal 2025.
Wall Street appears highly optimistic about ASML stock, with a consensus “Strong Buy” rating overall. Of the 23 analysts offering recommendations, 17 advise a “Strong Buy,” and the remaining six suggest a “Hold.”
The average analyst price target of $904.33 indicates 25.4% potential upside from the current price levels, while the Street-high price target of $1,148 suggests that ASML could rally as much as 59.2% from here.
Nasdaq-100 Stock #2: Regeneron Pharmaceuticals
New York-based Regeneron Pharmaceuticals, Inc. (REGN) is a trailblazing biotechnology company that invents, develops, and commercializes life-changing medicines for patients with serious diseases. Regeneron has a strong track record of translating groundbreaking science into effective treatments, many of which are developed in-house. The company’s innovative medicines and expanding pipeline target a wide range of conditions, including eye diseases, cancer, allergies, inflammatory diseases, cardiovascular and metabolic disorders, neurological diseases, and rare conditions.
Valued at a market cap of roughly $78.6 billion, shares of this biotech company have pulled back almost 15.5% over the past year.
Regeneron posted its Q3 earnings results at the end of October, which blew past both Wall Street’s top and bottom-line projections. The company reported a revenue surge of nearly 11% year over year, hitting $3.7 billion and comfortably beating analyst projections, while its adjusted EPS of $12.46 marked an 8% annual jump and soared beyond estimates by roughly 6.5% margin.
Despite a notable 21% year-over-year dip in sales from its flagship drug, Eylea, Regeneron managed to deliver revenue growth, all thanks to strong contributions from Eylea HD, its blockbuster asthma drug Dupixent, and the oncology therapy Libtayo. Since its FDA approval in August 2023, Eylea HD has hit the ground running, driving robust sales in Q3. In fact, Eylea HD alone brought in $392 million in U.S. sales during the third quarter, showcasing its rapidly growing traction fueled by a dynamic patient transition.
Combined U.S. sales of Eylea HD and Eylea reached $1.5 billion, marking a 3% year-over-year increase. Furthermore, during the quarter, Regeneron demonstrated its commitment to shareholder value by repurchasing $738 million worth of its common stock. By the end of the quarter, the company still had $2.9 billion remaining under its authorized share repurchase program, showcasing its continued focus on strategic capital deployment.
Looking forward to fiscal 2024, management slightly raised its R&D expenses to range between $5.055 billion and $5.145 billion, while non-GAAP gross margin on net product sales is anticipated to be approximately 89%. Additionally, the company reduced its capital expenditures outlook for the entire year, projecting it to land between $700 million and $740 million, signaling a tighter focus on operational efficiency.
Meanwhile, analysts are projecting modest but steady growth for Regeneron Pharmaceuticals' bottom line in the upcoming fiscal years. For fiscal 2024, the company is expected to achieve earnings of $37.95 per share, followed by a slight increase to $38.16 per share in fiscal 2025.
REGN stock has a consensus “Moderate Buy” rating overall. Out of the 26 analysts covering the stock, 18 recommend a “Strong Buy,” one suggests a “Moderate Buy,” six advocate “Hold,” and the remaining one gives a “Moderate Sell” rating.
The average analyst price target of $1094.36 indicates potential upside of 53% from the current price levels. However, the Street-high price target of $1,300 suggests that the stock could rally as much as 81.8%.
Nasdaq-100 Stock #3: Microchip Technology
Arizona-based Microchip Technology Incorporated (MCHP) leads the charge in smart, connected, and secure embedded control solutions. With a robust product portfolio and intuitive development tools, Microchip empowers its customers to optimize designs, minimize risks, and reduce system costs and time to market. Serving around 120,000 clients across industries such as industrial, automotive, aerospace, defense, communications, and computing, Microchip is a trusted partner driving innovation and efficiency across diverse sectors.
With a market cap of approximately $31.1 billion, the stock is deep in the red, delivering a negative return of 35.8% over the past 52 weeks.
On Dec. 6, Microchip Technology paid out a quarterly dividend of $0.455 per share, reflecting a 3.6% increase from the year-ago quarter. With an annualized dividend of $1.82 per share, the company offers an enticing yield of 3.1%. Since initiating quarterly cash dividend payments in Q3 of fiscal year 2003, Microchip has raised its dividend 83 times, demonstrating its consistent commitment to returning value to investors.
Microchip revealed its stronger-than-expected fiscal 2025 Q2 earnings results on Nov. 5. The company’s net sales plunged almost 48.4% year over year to $1.2 billion but still narrowly edged past Street estimates. Moreover, its EPS of $0.46 also marked a notable 71.6% decline from the previous year and yet exceeded Wall Street’s forecast of $0.43, showcasing its resilience.
Reflecting on the company’s Q2 performance, CEO Ganesh Moorthy noted, "Our September quarter results were consistent with our guidance, as we continued to navigate through an inventory correction that’s occurring in the midst of macro weakness for many manufacturing businesses, accentuated by heightened weakness in our European business which is concentrated with Industrial and Automotive customers."
Despite these headwinds, management believes there are signs of potential recovery, such as flat sequential bookings, normalized cancellation rates, and a noticeable rise in expedited requests. These developments suggest that the company may be approaching a bottom, though visibility remains limited as it works through ongoing market adjustments.
Looking forward to Q3 of fiscal 2025, management forecast net sales to range between $1.025 billion and $1.095 billion, while adjusted EPS for the quarter is expected to land between $0.25 to $0.35. On the other hand, analysts tracking Microchip Technology project the company’s profit to shed almost 71.3% year over year in fiscal 2025 before recovering 57.6% in fiscal 2026.
Overall, Wall Street appears optimistic about MCHP stock, with a consensus “Moderate Buy” rating. Of the 22 analysts offering recommendations, 15 advise a “Strong Buy,” one gives a “Moderate Buy,” five advocate “Hold,” and the remaining one suggests a “Moderate Sell.”
The average analyst price target of $84.32 indicates 46% potential upside from the current price levels, while the Street-high price target of $95 suggests that MCHP could rally as much as 64.1% from here.
