How has this stock managed to generate such huge gains so early in the year? Let’s take a look at what’s going on here.

Chips are hot

ASML specialises in the design and manufacture of Extreme Ultraviolet (EUV) lithography systems – sophisticated machines that are crucial for the production of advanced computer chips. It’s pretty much the only company in the world that makes these EUV systems so it’s a key player in the current tech/AI revolution. Without its products the tech boom would grind to a halt.

Now this year, companies that play an important role in chip manufacturing have seen their share prices surge. One reason for this is that Taiwan Semiconductor Manufacturing Co – the world’s largest chip manufacturer – has announced a massive capex increase for 2026.

It plans to spend $52bn-$56bn this year building new manufacturing plants. So it’s essentially going to be writing massive cheques to companies like ASML for equipment.

Another reason for the share price surge this year is that, with all the geopolitical carnage, there’s been more focus on ‘silicon sovereignty’. This is where nations are aiming to control their own semiconductor supply chains to ensure national and economic security.

For the last few decades, the chip industry’s been structured for the lowest possible cost, with a lot of manufacturing taking place in Taiwan and Korea. Now however, governments are optimising for geopolitical safety.

Strong earnings

ASML also produced strong earnings for the fourth quarter of 2025 in January. These were far better than expected. For Q4, total net sales came in at €9.7bn versus €7.5bn in Q3. Net bookings was a record €13.2bn – miles ahead of analysts’ forecast of €6.3bn.

In the earnings report, management noted that the group’s customers (eg Taiwan Semi) have recently been more positive in their assessment of the medium-term outlook for AI demand. As a result, they’re investing in capacity.

“We expect 2026 to be another growth year for ASML’s business, largely driven by a significant increase in EUV sales and growth in our installed base business sales.”
ASML President and CEO Christophe Fouquet

Bullish broker sentiment

Given the backdrop and the strong earnings, analysts have been raising their price targets for the stock. Recently, a number of analysts have increased their target to $1,650 or higher, which has no doubt helped the stock.

An investment opportunity?

Is ASML stock worth considering today? Possibly – I see a lot of potential in the long run.

That said, I think it could pay to wait for a better buying opportunity. After a 35% gain in a little over a month, we could see some profit taking soon.

I suspect that recently a lot of institutional money has flowed out of software and into chips. There could be a reversal of this trend at some point in the near future, creating an opportunity.

Note that the stock’s now quite expensive – the price-to-earnings ratio is about 43. This doesn’t leave much room for error (eg capacity constraints).

Given the high valuation, I think there are better opportunities to look at in the market right now.

The post Up 35% in 2026, Europe’s most valuable company is boosting my Stocks and Shares ISA appeared first on The Motley Fool UK.

Of course, the deepest moat is a company that has no competition in a particular market. So out of curiosity, I asked ChatGPT what the most powerful monopoly growth stock on Earth is.

Let’s unpack the AI bot’s answer.

Rare European tech giant

ChatGPT was pretty emphatic: Dutch semiconductor equipment maker ASML (NASDAQ:ASML) is the most powerful monopoly growth stock on the planet. It said it’s not just market-leading, or a duopoly, but the only game in town in one crucial area.

Specifically, ASML is the only company capable of producing EUV (extreme ultraviolet) lithography machines. These are the bus-sized systems required to make cutting-edge chips. The firm’s next-generation ‘High NA’ EUV machines cost upwards of $400m each!

So these weren’t being bought by any old Tom, Dick and Harry on Black Friday. It’s primarily the world’s largest chipmakers — Taiwan Semiconductor Manufacturing Company (TSMC), Samsung Electronics, and Intel — that fork out for this critical equipment.

In other words, without ASML’s EUV machines, there would be no Nvidia and AI boom. No self-driving cars or advanced smartphone chips. As ChatGPT puts it, ASML is “the choke point of the entire semiconductor industry“.

This makes it the most important tech company that hardly anyone’s heard of.

Misleading impression

ChatGPT then gets a bit carried away, breathlessly saying that ASML has “the single most powerful monopoly (and growth engine) in global markets“.

I wouldn’t go that far. Revenue is only expected to increase around 5% next year to €34.3bn, as the firm deals with export restrictions to China.

On the market side, we have seen continued positive momentum around investments in AI, and have also seen this extending to more customers, both in leading-edge Logic and advanced DRAM. On the other hand, we expect China customer demand, and therefore our China total net sales in 2026, to decline significantly compared to our very strong business there in 2024 and 2025. ASML, Q3 2025.

Unfortunately, ChatGPT fails to mention the geopolitical risk associated with the stock. The world’s two superpowers — the US and China –are battling for AI supremacy, putting ASML’s critical lithography systems at the centre.

As such, the company’s growth has slowed as its China business — accounting for roughly a third of revenue — has been impacted. So I wouldn’t say it has the most powerful growth engine in global markets. I think this gives the wrong impression of reality.

The future’s still bright

Having said that, this is clearly a very special company, and I expect it to get much larger in future as the tech revolution accelerates.

According to industry association SEMI, annual spending on advanced chipmaking equipment will jump from $26bn last year to more than $50bn by 2028. This should directly benefit ASML, even with China sales restricted.

Earnings growth of 21% is expected in 2027. Going on this, the stock’s trading at 27.8 times forward earnings.

At this price, I reckon ASML is a buying opportunity worth checking out. It’s one of a number of stocks that have caught my attention lately.

The post I asked ChatGPT for the most powerful monopoly growth stock on Earth and it said… appeared first on The Motley Fool UK.

An AI monopoly

The company I’m talking about is ASML (NASDAQ: ASML). Based in the Netherlands, it makes extremely advanced equipment for semiconductor manufacturing.

More specifically, it specialises – and has a monopoly – in Extreme Ultraviolet (EUV) lithography machines. This equipment – which is very expensive – is needed by companies like Taiwan Semiconductor Manufacturing Company, Samsung, and Intel to produce high-powered chips for AI.

Two reasons ASML can get to $1trn

There are two main reasons I believe that this European company will be the first to achieve a $1trn market cap.

The first is that it is the largest company in Europe today with a market cap of about €291bn. So, it has a headstart on every other company. The second-largest company is software firm SAP with a market cap of €248bn. The third-largest is luxury goods powerhouse LVMH at €237bn.

The second reason is that I expect to see strong top-and bottom-line growth over the next decade as the AI revolution gathers steam. In the years ahead, companies like Taiwan Semi and Samsung are likely to build a significant number of new chip manufacturing plants in order to meet the high demand for semiconductors. This should lead to strong revenue growth for ASML (it’s expecting growth of about 15% this year). Note that the company doesn’t just generate revenue from sales of its equipment – it also provides software that optimises the performance of its technology and enables chipmakers to achieve higher yields, and generates revenue from the servicing of its installed base of equipment.

“If our hardware innovations are Batman, then software is its Robin. Even though you might know of ASML as a hardware company, we actually have one of the world’s largest and most pioneering software communities.”
ASML

How long could it take?

How long could it take for ASML to get to a $1trn market cap?

Well, let’s keep things simple and say that the company averages 15% annual revenue growth over the next decade (it has averaged 19% over the last five years) and that this growth pushes the share price up by 15% per year. In this scenario, it would take about eight years to be worth $1trn (€850m at today’s exchange rate).

I could be way off the mark with this scenario, however. It could take much longer (or potentially less time) to get to $1trn, depending on revenue growth, earnings growth, and the valuation.

Worth a look?

Is this growth stock worth considering today? I believe so.

There are risks around the timing of orders (they tend to be quite lumpy) and tariffs. However, taking a long-term view, I think the stock should provide attractive returns.

It’s worth noting that earlier this month, four top-level company insiders bought quite a bit of stock. This suggests that they expect the share price to go higher.

The post Prediction: this Nasdaq-listed AI stock will one day be Europe’s first $1trn company appeared first on The Motley Fool UK.

However, for those wanting more targeted exposure to AI, here are four other stocks to consider.

Foundational layer

Let’s start with two tech firms that are absolutely central to the AI revolution. That’s ASML (NASDAQ:ASML) and Taiwan Semi (NYSE:TSM), or TSMC.

ASML‘s the only company in the world that supplies the advanced EUV (extreme ultraviolet) lithography machines needed to make cutting-edge semiconductors. TSMC’s a major buyer of these systems, using them to manufacture AI chips for Nvidia and others.  

Given their foundational importance, you’d be forgiven for thinking these stocks are super expensive. But that’s not really the case, with ASML and TSMC trading on forward price-to-earnings (P/E) ratios of 26 and 22 respectively.

By contrast, Nvidia and Tesla carry forward P/E multiples of 39 and 138, while AI software firm Palantir is on another planet at 122 times sales. So they’re discounted to many other AI stocks, particularly those in America (ASML’s Dutch).

As for risks, ASML can’t promise any growth in 2026 due to macroeconomic and geopolitical uncertainties, which are rattling chipmakers. This situation adds uncertainty, though it’s worth noting that analysts see double-digit growth resuming in 2027.

TSMC’s facing no such headwinds, and sees 20%+ growth continuing over the medium term. However, any backtracking on these targets is a risk, as is any escalation in China-Taiwan tensions.

AI agents

Next, I also think enterprise software company Salesforce (NYSE:CRM) is attractively priced. After falling 26% year to date, the stock’s forward P/E multiple is just 22 (slightly less than the S&P 500).

However, the firm continues to grow, with Q2 revenue up 10% to $10.2bn. And the company’s Agentforce platform for AI agents has closed more than 12,500 deals since launching last year, with over 6,000 of them paid.

CEO Marc Benioff commented: “These results reflect the success of our customers — like Pfizer, Marriott, and the US Army — who are transforming into agentic enterprises, where humans and AI agents work side by side to reimagine workflows, accelerate productivity, and deliver customer success.”

While economic uncertainty remains a risk and could slow customer adoption of AI agents, I remain bullish long term. Especially while the stock’s trading quite cheaply.

Footsie trust

Finally, a basket of stocks now in the shape of Scottish Mortgage Investment Trust. The FTSE 100 firm’s portfolio holds many obvious AI names including Nvidia, Meta and Amazon, as well ASML and TSMC.

However, Scottish Mortgage is also invested in AI data platforms Snowflake and Databricks. The latter’s a private company, and this is another reason to consider the trust. It has the ability to invest in exciting unlisted AI-centric firms with massive growth potential.

Naturally, given this heavy exposure to the technology, the trust would likely underperform if AI stocks fell out of favour with investors.

A solid foundation

I think ASML, TSMC, Salesforce and Scottish Mortgage could provide solid foundations for a portfolio in the age of AI. As such, I reckon some or all of them are worth exploring further.

The post Here’s a 4-stock ISA portfolio to consider for the AI revolution appeared first on The Motley Fool UK.

Here’s why I think this world-class tech firm deserves a place on investors’ radars.

A near-monopoly

ASML makes semiconductor equipment, namely the lithography scanners that print the tiny circuits on computer chips. What makes it unique is that it’s the sole supplier of EUV (extreme ultraviolet) machines used for the most advanced chips (ones used in AI systems, iPhones, etc.). 

While it has a 100% monopoly on this market, companies like Nikon and Canon remain competitors for older lithography technologies (known as DUV). But ASML’s new High NA EUV machine pushes innovation to the extreme, enabling sub-2nm nodes. In other words, ultra-tiny chip designs. 

ASML makes money both selling these machines – the new ones cost $350m-$400m each – and then maintaining the installed base worldwide. Given this extreme cost, its customer base largely consists of leading chip foundries like Taiwan Semiconductor Manufacturing Company (TSMC), Samsung, and Intel.

Revenue has jumped from €11.8bn in 2019 to €28.3bn last year, with net profit rising from €2.6bn to €7.6bn over this time. Management sees revenue rising another 15% or so this year.

Near-term challenges

There are a few reasons for the stock’s weakness since last summer. One relates to tariff uncertainty. ASML has one of the world’s most complex supply chains, and we just don’t know what’s going on with tariffs from one week to the next.

Also, given the fundamental importance of EUV technology to the global chip industry, ASML has found itself in the middle of the trade war between the US and China. It’s having to seek new export licences, with strict limits on what it can sell to Chinese customers.

Consequently, ASML is unable to say whether there will be any growth in 2026. In Q2, it booked €5.5bn of orders against €7.7bn of sales. 

Adding to the uncertainty is Intel, which has been struggling for some time now. It might be a stretch to expect Intel to start hoovering up loads of High NA EUV machines.

Attractive valuation

These types of challenges were why I sold ASML stock last year. It was looking a bit pricey given the challenges and uncertainty.

Fast-forward to now, though, and I think the valuation looks too cheap to ignore. The price-to-earnings (P/E) ratio is 28, which is a significant discount to the five-year average (nearer 40).

On a forward-looking basis, the P/E multiple is 26, falling to just 22 by 2027. All other valuation metrics are discounted compared to previous years.

Given this, I suspect much of the fear and risk is priced in here. The fact remains that ASML still dominates the lithography industry, without which there would be no AI revolution at all.

Meanwhile, the firm now rakes in around €8bn in annual revenue from servicing its installed base of systems. This aftermarket revenue is both recurring and high-margin.

Over the long term, demand for chips will rise, and both Taiwan Semiconductor Manufacturing and Samsung will eventually transition to High-NA EUV to continue shrinking transistor features.

I reckon ASML stock looks like a bargain hiding in plain sight. And this makes it worth considering for investors with a multiyear horizon.

The post Down 27%, this world-class growth stock now looks very attractive appeared first on The Motley Fool UK.

While chipmakers like Nvidia dominate headlines, the broader AI value chain stretches far beyond one company or sector. Two stocks I see as worth considering at opposite ends of that chain are Dutch semiconductor specialist ASML (NASDAQ:ASML) (traded in Europe and the US) and American software giant Salesforce (NYSE:CRM).

Supplying the picks and shovels

If AI is the new gold rush, ASML is selling the picks and shovels. The company is the world’s only manufacturer of extreme ultraviolet (EUV) lithography machines. This essential equipment is used to produce the most advanced semiconductors on the planet.

These cutting-edge chips are the backbone of AI infrastructure, powering data centres, model training, and edge deployment. Nvidia’s GPUs, AMD’s accelerators, and Apple’s in-house silicon all rely on chip foundries that use ASML’s EUV machines. Without EUV, there is no AI.

ASML’s machines are immensely complex, and the latest high NA (numerical aperture) EUV lithography machines cost around $380m. Barriers to entry are sky-high, and the firm has near-monopoly status in its niche. And while Chinese entities are trying to catch up, they appear to be a long way behind.

Risks? Well, ASML’s management recently disappointed the market with cautious guidance for 2026, stating they “cannot confirm growth in 2026” due to macroeconomic uncertainty and the impact of ongoing US-China trade tensions and tariff risks.

However, at 24 times forward earnings and with a price-to-earnings-to-growth (PEG) ratio of 1.49 — potentially cheap given its near-monopoly status — it’s certainly worth considering. I am watching very closely.

AI for enterprise

At the other end of the value chain sits Salesforce, a global leader in customer relationship management (CRM) software. Its products help businesses manage sales, marketing, service, and data. It’s now looking to be a leader in agentic AI.

Through its Einstein AI platform and new Copilot tools, Salesforce is automating workflows, generating insights, and enhancing productivity for customers across sectors. It’s not just about operational efficiency. This is about turning AI into a revenue-driving force within the enterprise.

What’s more, it also practices what it preaches. AI is accounting for 30% to 50% of the company’s own workload. Unlike hardware firms, Salesforce isn’t building chips or data centres. Instead, it’s applying AI where it counts: the user interface.

Moreover, with one of the world’s largest structured datasets on customer behaviour, and a sticky client base, the company is well-positioned to monetise AI over time.

There are risks, of course. The traditional enterprise solutions business is slowing and AI really is the way forward for Salesforce. One concern is whether Salesforce can use its strength to become the agentic AI market leader. And that’s always an issue with the likes of Microsoft around.

However, after a tough couple of years, Salesforce has refocused on profitability, cut costs, and improved free cash flow. It’s currently trading at 21 times forward earnings and with a PEG ratio of 1.2. I don’t think that’s too demanding and that’s why I believe investors should consider it. This stock is now a large part of my portfolio.

The post 2 potential buy-and-hold US stocks for the AI revolution appeared first on The Motley Fool UK.

Here’s how I’m hoping my portfolio grows in value as the AI era advances.

Broad-based exposure

Over the past few years, I have built up a lot of different AI investments. For a start, I hold a Nasdaq 100 exchange-traded fund (ETF). This gives me broad exposure to all the leading tech giants, including Microsoft, Amazon, and Alphabet.

These companies are investing heavily in building out AI infrastructure and services.  

I also have a long-standing position in Scottish Mortgage Investment Trust. As well as Amazon, Meta, and ASML (NASDAQ: ASML), the trust also gives my portfolio exposure to unlisted AI-powered companies like Stripe, Databricks, and ByteDance. 

Three AI layers

Turning to individual shares, I divide my AI holdings up into three camps: infrastructure, enablers, and consumer applications.

The first refers to companies that build the hardware or infrastructure that powers AI models. For example, Nvidia supplies the GPUs that train and run most cutting-edge AI models, while Taiwan Semiconductor Manufacturing Company (TSMC) builds the chips for Nvidia and dozens of other tech firms. These are foundational names in the AI hardware supply chain.

Next, there’s Cloudflare, whose global data centre network offers ‘AI at the edge’ services. These help apps run AI models faster and closer to users.

As for enablers, these firms embed AI into their platforms to make users more productive or secure. For example, Salesforce is utilising AI to help its enterprise customers make decisions and deploy AI agents (intelligent software that automates various tasks, boosting efficiency). 

Meanwhile, CrowdStrike uses AI to detect and thwart billions of cyber threats a day. And Shopify has rolled out powerful AI products for its online merchants, helping them create product descriptions and gain customer data insights.

Thirdly, I’m invested in companies that are using AI to improve the user experience. One is Duolingo, which uses AI to power its language learning lessons, including real-time conversations with an avatar.

Now, I’m certainly not saying investors should copy this list. I bought some of these shares at much cheaper prices, and each one carries its own risks. It’s just to show the myriad ways one can invest in the AI revolution.

A potential opportunity

Finally, I want to finish by highlighting a high-quality AI stock, which is ASML. The company is at the heart of the AI revolution because it builds the EUV (extreme ultraviolet) lithography machines that make the world’s most advanced computer chips. 

I should mention that I sold this stock last year because I was worried that export restrictions on its machines to China might limit near-term growth. This fear has largely come true, and adds uncertainty here.

However, the stock has fallen 32% in the past year. And based on forecasts, it’s now trading at 25 times forward earnings, falling to just 20 by 2027.

That strikes me as good value for a firm with a monopoly-like position in a critical part of the semiconductor supply chain. As such, I reckon it’s worth considering for an AI portfolio.

The post How I’m positioning my ISA and SIPP for the AI revolution appeared first on The Motley Fool UK.

The AI ecosystem

The AI ecosystem is quite broad. However, to my mind, there are four key areas:

• Chip and networking companies – these make the computing hardware needed for AI.
• Data companies – these are responsible for storing the data needed for AI.
• Software companies – these are creating AI applications for businesses and consumers (like AI agents).
• Cybersecurity companies – these are responsible for protecting businesses and consumers from sophisticated cyber threats.

I think it’s worth considering some exposure to each of these areas. Taking a diversified approach is often the best way to play themes like this.

AI stocks

In terms of individual companies, in the chip and networking space some names worth highlighting include Nvidia, Broadcom, AMD, Taiwan Semiconductor, ASML (NASDAQ: ASML), Lam Research, KLA Corp, and Arista Networks. All of these companies are benefitting from the AI build-out today.

For data, some companies to check out include Amazon, Microsoft, Oracle, and Snowflake. These all specialise in storing customer data and offering insights.

In the software space, companies having success include Alphabet, Salesforce, ServiceNow. These businesses are rolling out AI agents and other AI solutions today.

Finally, in cybersecurity, some of the biggest players are CrowdStrike, Palo Alto Networks, and Fortinet. These businesses are helping protect against AI threats.

I like this stock

Now, I’m not saying that all of these stocks are Buys today. Some are quite expensive so it could be worth waiting for a pullback.

But there are few names in the mix that I believe are worth considering at present. One is ASML.

This company looks set to play a really important role in the AI revolution. That’s because it makes equipment for the manufacturing of AI chips.

Without ASML, there literally is no AI revolution. Because currently, it’s the only company in the world that makes the sophisticated technology (Extreme Ultraviolet (EUV) lithography machines) required for AI chip production.

Currently, ASML trades on a forward-looking price-to-earnings (P/E) ratio of about 25. I think that’s quite a reasonable valuation.

This is a company with a great track record (five-year revenue growth of 140%) that is very profitable (five-year average return on capital of 31%). It also has huge potential given that major chip manufacturers are expanding their production.

Now obviously, there are risks. With this business, orders can be lumpy at times. So, quarterly earnings can sometimes disappoint (sending the share price down temporarily). Tariffs and import restrictions also need to be considered.

Overall, though, I see a lot of potential and believe the stock is worth considering today. It’s worth noting that after a period of weakness, it has started rising again.

The post How to build a Stocks and Shares ISA for the AI era appeared first on The Motley Fool UK.

A key player in the tech revolution

First up, we have ASML (NASDAQ: ASML). It’s one of the most important players in the semiconductor industry.

ASML specialises in lithography systems, which are used to produce computer chips. What sets this company apart from others though is that it’s the only manufacturer of Extreme Ultraviolet (EUV) lithography machines, which are used to produce the most advanced chips (needed for artificial intelligence and other emerging technologies).

Given its market position, it looks well placed for success in our increasingly digital world. As companies like Intel and TSMC build chip manufacturing plants in the years ahead, ASML should see high demand for its state-of-the-art equipment.

At present, analysts expect ASML to generate revenue and earnings per share growth of 15% and 23% respectively this year. That’s a decent level of growth.

As for the valuation, the forward-looking price-to-earnings (P/E) ratio is only 24 using next year’s earnings per share forecast. Looking at that valuation, I see growth at a reasonable price. Note that a few years ago, ASML had a P/E ratio in the 40s. So, the valuation has come down substantially recently.

A risk with this stock is that equipment orders can be lumpy at times. Like London buses, they sometimes go missing for a while before all arriving at once.

Another risk is import restrictions. These could have a short-term impact on growth.

Taking a five-year view however, I’m excited about the potential here. I expect ASML’s revenues and earnings to increase significantly in the years ahead.

An under-the-radar AI stock

Another company that could prosper as the world becomes more digital is Snowflake (NYSE: SNOW). It’s a data storage and analytics services provider that aims to help other companies achieve their full potential through data and AI.

This company is having a lot of success right now as businesses scramble to get their data organised (in order to take advantage of AI). Last quarter (ended 30 April), the company generated revenue of $1bn, up 26% year on year.

Note that at the end of the quarter, the company had 606 customers with trailing 12-month product revenue greater than $1m. When I first started covering Snowflake back in 2020, it had less than 70 of these customers.

One risk to be aware of with Snowflake is that profits are still small. This can lead to share price volatility at times (because it’s harder to value the stock accurately).

Another risk is competition from rivals such as Amazon and Databricks. Data is a competitive industry.

I see quite a bit of long-term potential here, however. It’s worth noting that since Snowflake’s recent earnings report, several brokers have raised their price targets to between $230 and $250 – a level significantly higher than today’s share price.

The post 2 world-class stocks to consider buying in June appeared first on The Motley Fool UK.

Whatever term we use to describe a stock market fall, I firmly believe one thing. These are good times for stock market investors, not bad times. We’re in it for the long term and we want to buy shares when they’re cheap, right?

Chip makers down

I’m drawn to ASML Holdings (NASDAQ:ASML) right now. The Dutch developer of advanced chip fabrication technology reported disappointing orders for the first quarter of fiscal 2025, at just €3.9bn. That’s well short of €7.1bn in the final quarter of 2024.

The company spoke of industry-wide uncertainty caused by tariff turmoil. Its US-listed shares took a further dip, and we’re now looking at a 12-month fall of around 30%.

CEO Christophe Fouquet has previously said order bookings “are not necessarily an accurate reflection of the business momentum.” He added that ASML will soon stop providing those numbers.

Long-term health

Quarterly sales still came in pretty much bang on expectations at €7.7bn, soundly beating the previous year’s Q1 total of €5.3bn.

The big question is how much this short-term upheaval is likely to damage ASML’s long-term prospects.

It’s the only supplier of extreme ultraviolet (EUV) photolithography equipment. That’s the technology needed for today’s smallest-scale chip production, which is in big demand for artifical intelligence (AI) development.

It’s really not easy for firms to get in on the act and start up development and production to the same standards in the US, no matter how big the tariff threat.

I think the biggest danger to ASML might come from Chinese tech developers. And they could be, perhaps ironically, spurred on by the tariffs intended to protect against them. But ASML is the kind of tech stock I think investors should consider when stock markets are under today’s pressure.

Bigger yields

Going for knocked-down growth stocks isn’t the only way to try to benefit from a stock market slump. It can also be a really good time to consider making the most of enhanced dividend yields.

Look at Lloyds Banking Group. Towards the end of March its forecast dividend yield stood at around 4.7%. Then by early April a tariff-triggered share price fall pushed it to 5.7%. Nothing had changed at the bank.

That might not sound like a lot. But a £10,000 investment with an annual return of 5.7% could compound to £10,500 more after 20 years than at 4.7%.

The biggest risk I see to Lloyds right now is the car loan mis-selling case, with a verdict due in the summer. Looking at the Lloyds share price rebound makes me think the markets might not see much of a tariff threat after all.

There are many more top-dividend FTSE 100 stocks that I think we should consider buying on any big stock market falls.

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