Mistral AI stake could expand ASML’s multiple, says BofA

BofA notes that according to Reuters, ASML (ASML) have taken a stake in French AI startup Mistral AI. If unconfirmed media reports are correct, ASML has invested EUR 1.3B in Mistral AI’s latest funding round. The same reports indicate that ASML has become Mistral AI’s largest shareholder and would therefore have board representation. Although it may seem counterintuitive for a Semicap company like ASML to take a stake in an LLM startup, if true the firm thinks this potential transaction could help ASML on multiple fronts, namely better understand the roadmap of AI companies both in terms of logic and memory, provide optionality for ASML shareholders in the medium to long term, and offer a seat at the table of negotiations when it comes to regulating AI but also AI export control regulations. BofA has a Buy rating on ASML with a price target of EUR 724.