ASML Holding
Rating
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Adding on Dips — Active Accumulation
Combined average of Moat (AI Resilience), Growth, and Valuation scores.
Moat Score
The only company in the world capable of producing EUV and High-NA EUV machines required for advanced chips below 7nm.
ASML is the Sole Provider of the world's most complex machines:
- EUV and High-NA Monopoly: Extreme Ultraviolet (EUV) lithography is required for every advanced chip from Apple, NVIDIA, and AMD. High-NA EUV — at $380M per system — extends this monopoly to 1.4nm and below, the only viable path to future AI silicon. ASML is the only company that can build either.
- Technological Barrier: Developing EUV took 20+ years and billions in funding from TSMC, Intel, and Samsung co-investment. A competitor would need at minimum a decade and the cooperation of the entire semiconductor ecosystem to come close — and still wouldn't have ASML's 30+ years of machine performance data.
- Service Ecosystem and AI Demand Flywheel: Once a machine is installed, ASML generates recurring service revenue for 20+ years. Q1 2026 Installed Base Management revenue hit €2.5B (+25% YoY) as the installed base expands and customers pay for high-margin performance upgrades to extract more output. AI-driven chip demand accelerated capacity buildouts, prompting management to raise full-year 2026 guidance to €36–40B from €34–39B; ASML now targets 60+ EUV shipments in 2026 (vs 48 in 2025), rising to ~80 in 2027 led by HBM/memory demand.
Ten Moats Verdict
ASML is the most AI-resilient business in the portfolio. Physical hardware monopolies, regulatory protection, and manufacturing expertise rooted in physics cannot be disrupted by software AI — and the AI infrastructure boom is actively accelerating demand for ASML's machines. High-NA EUV cements this monopoly for the next decade.
Not applicable — ASML sells precision lithography hardware to chip fabricators, not UI-based software.
Not applicable to extreme ultraviolet lithography physics and optics manufacturing.
Not applicable to this hardware monopoly business model.
EUV optics engineers, plasma physicists, and precision mechatronic specialists are among the rarest people on Earth. AI cannot replicate 30 years of applied physics expertise embedded in ASML's workforce.
Full EUV system bundle: laser light source + optics + scanner + metrology + software + 20-year service contract = inseparable, multi-year integration. High-NA EUV adds a new, higher-ASP bundle tier no competitor can match.
30+ years of machine performance data from every major chip fab run generates yield-optimisation intelligence that is compounding, exclusive, and the foundation of the recurring service contract moat.
Dutch export-controlled technology requires government approval per sale; classified as dual-use under Wassenaar. VEU fast-track exemptions for Chinese customers were revoked in 2026, with ASML expecting significantly lower China demand in 2026; no Chinese fab can receive EUV systems. TSMC/Samsung/Intel dependency and US/Dutch co-regulation create a state-protected monopoly with no legislative path to disruption.
Deep co-development IP partnerships with TSMC, Samsung, and Intel create mutual dependency. AI chip demand is widening this loop — more compute demand drives more fab investment which drives more ASML machines. Not yet 'strong' as it remains bilateral rather than self-reinforcing at scale.
ASML EUV machines run 24/7 inside fabs generating chips the world runs on. Removing them mid-cycle requires halting production lines worth billions per day. AI server demand makes these machines more mission-critical, not less.
ASML IS the system of record for advanced node semiconductor manufacturing globally. High-NA EUV is the only viable path to 1.4nm and below, locking in ASML's monopoly position through at least 2035.
Combined average of Moat (AI Resilience), Growth, and Valuation scores.
Moat Score
The only company in the world capable of producing EUV and High-NA EUV machines required for advanced chips below 7nm.
Growth Score
Q1 2026 revenue of €8.8B beat consensus by €0.3B (+13% YoY), prompting a guidance raise to €36–40B for full-year 2026. Korea drove the geographic mix to 45% of system sales as China collapsed to 19% (from 36% in Q4 2025), with EUV at 66% of system revenue. Installed Base Management revenue grew +25% YoY to €2.5B as customers pay for high-margin output upgrades. ASML recognised revenue on 2 High-NA EUV systems in Q1 and targets 60+ total EUV shipments in 2026 (vs 48 in 2025), rising to ~80 in 2027. EPS CAGR of ~22% through 2027 is driven by mix shift toward higher-ASP systems and margin expansion. The 2030 target of €44–60B implies 9–14% revenue CAGR from the revised 2026 baseline.
Valuation Score
At ~$1,758 (June 10, 2026) — within 4% of the all-time high ($1,831) after an AI-fueled EUV demand rally and broker upgrades — ASML now trades fractionally ABOVE the base case of $1,750, yielding a valuation score of 65. The May pullback has fully reversed; the margin of safety is gone and the stock is pricing in flawless execution of the 60+ EUV shipment ramp. Upside from here depends on the bull case ($2,500: sovereign fabs, 30+ High-NA shipments, 55%+ gross margin) while the AI-capex digestion risk remains live. Forward P/E of ~43× now sits near ASML's 5-year historical premium of ~45×.
The Strategic Bottleneck Moat
ASML is the Sole Provider of the world's most complex machines:
- EUV and High-NA Monopoly: Extreme Ultraviolet (EUV) lithography is required for every advanced chip from Apple, NVIDIA, and AMD. High-NA EUV — at $380M per system — extends this monopoly to 1.4nm and below, the only viable path to future AI silicon. ASML is the only company that can build either.
- Technological Barrier: Developing EUV took 20+ years and billions in funding from TSMC, Intel, and Samsung co-investment. A competitor would need at minimum a decade and the cooperation of the entire semiconductor ecosystem to come close — and still wouldn't have ASML's 30+ years of machine performance data.
- Service Ecosystem and AI Demand Flywheel: Once a machine is installed, ASML generates recurring service revenue for 20+ years. Q1 2026 Installed Base Management revenue hit €2.5B (+25% YoY) as the installed base expands and customers pay for high-margin performance upgrades to extract more output. AI-driven chip demand accelerated capacity buildouts, prompting management to raise full-year 2026 guidance to €36–40B from €34–39B; ASML now targets 60+ EUV shipments in 2026 (vs 48 in 2025), rising to ~80 in 2027 led by HBM/memory demand.
Ten Moats Verdict
ASML is the most AI-resilient business in the portfolio. Physical hardware monopolies, regulatory protection, and manufacturing expertise rooted in physics cannot be disrupted by software AI — and the AI infrastructure boom is actively accelerating demand for ASML's machines. High-NA EUV cements this monopoly for the next decade.
Not applicable — ASML sells precision lithography hardware to chip fabricators, not UI-based software.
Not applicable to extreme ultraviolet lithography physics and optics manufacturing.
Not applicable to this hardware monopoly business model.
EUV optics engineers, plasma physicists, and precision mechatronic specialists are among the rarest people on Earth. AI cannot replicate 30 years of applied physics expertise embedded in ASML's workforce.
Full EUV system bundle: laser light source + optics + scanner + metrology + software + 20-year service contract = inseparable, multi-year integration. High-NA EUV adds a new, higher-ASP bundle tier no competitor can match.
30+ years of machine performance data from every major chip fab run generates yield-optimisation intelligence that is compounding, exclusive, and the foundation of the recurring service contract moat.
Dutch export-controlled technology requires government approval per sale; classified as dual-use under Wassenaar. VEU fast-track exemptions for Chinese customers were revoked in 2026, with ASML expecting significantly lower China demand in 2026; no Chinese fab can receive EUV systems. TSMC/Samsung/Intel dependency and US/Dutch co-regulation create a state-protected monopoly with no legislative path to disruption.
Deep co-development IP partnerships with TSMC, Samsung, and Intel create mutual dependency. AI chip demand is widening this loop — more compute demand drives more fab investment which drives more ASML machines. Not yet 'strong' as it remains bilateral rather than self-reinforcing at scale.
ASML EUV machines run 24/7 inside fabs generating chips the world runs on. Removing them mid-cycle requires halting production lines worth billions per day. AI server demand makes these machines more mission-critical, not less.
ASML IS the system of record for advanced node semiconductor manufacturing globally. High-NA EUV is the only viable path to 1.4nm and below, locking in ASML's monopoly position through at least 2035.
Growth Analysis
Growth Drivers
Key Risk
Hyperscaler AI capex digestion: if any two of Microsoft, Meta, Alphabet, Amazon, or Oracle cut FY2027 capex guidance by >15% in their H2 2026 earnings (signalling the ~$725B Q1 2026 capex run-rate is peaking), TSMC and SK Hynix would defer EUV deliveries beginning Q1 2027, pushing ASML's 2027 revenue below €40B and compressing the forward multiple from ~36× toward the semi-cyclical norm of ~25× — a scenario rendered more probable by Burry's January-2027 SOXX/NVDA puts, SOX trading 60% above its 200-day MA, and CAPE at dot-com-peak readings
Score Derivation
Base 80 (revenue CAGR 13–16% NTM; EPS CAGR ~22% 2025–2027 justifies 15–30% CAGR base) + 5 recurring (Installed Base Management +25% YoY to €2.5B, 20-year lifetime per machine) − 5 cyclicality/concentration (hyperscaler AI capex digestion risk; China demand collapsed to 19% mix; TSMC/Samsung/SK Hynix triopoly concentration) = 80
Price Scenarios (12–24 Months)
Valuation Multiples
| Trailing P/E (GAAP) | ~72× |
| Forward P/E (NTM) | ~43× |
| PEG Ratio | ~2.0× |
| Price / Sales (NTM) | ~15× |
| Price / FCF | ~90× |
At ~43× forward P/E after the June rally, ASML now trades near its own 5-year historical average of ~45× and at a steep premium to the semiconductor sector median of ~25×, reflecting the unmatched EUV monopoly. The PEG of ~2.0× is no longer cheap — it requires ASML to sustain ~22% EPS CAGR through 2027 with no multiple compression, which the High-NA shipment ramp and service revenue compounding make plausible but leave no room for disappointment. The gap between trailing (~72×) and forward (~43×) still signals a sharp earnings acceleration ahead as High-NA systems contribute meaningful revenue — a structurally bullish signal that is offset by the rising probability of an AI-capex digestion event compressing the entire semi-equipment multiple toward the cyclical norm of ~25×.
Approximate figures as of June 2026 (price ~$1,758).
Where We Are vs Targets
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Expanded DUV export controls eliminate remaining China access while AI capex plateaus — 2027 EPS stalls near €28 and the multiple compresses to ~30× on earnings uncertainty.
- US/EU extend DUV immersion export ban to all Chinese fabs by end of 2026, removing the remaining ~15% of 2025 China revenue with no near-term geographic offset
- Hyperscaler AI infrastructure spending decelerates materially in H2 2026–H1 2027, reducing TSMC and SK Hynix capital expenditure plans and deferring EUV machine deliveries
- High-NA EUV gross margins remain below 48% through 2027, compressing blended gross margin toward 51% and pushing 2027 EPS consensus below €30
2026 guidance midpoint of €38B achieved; High-NA scales to 20+ annual shipments; AI-driven fab demand sustains EPS recovery toward €40+ in 2027, re-rating toward 38× NTM.
- Non-China AI capex from TSMC, SK Hynix, and Samsung fully absorbs China revenue decline; 2026 revenue lands in €37–39B range as guided
- High-NA EUV scales to 20+ annual shipments by end of 2026, improving ASP mix and driving gross margin toward 53–54% by year-end
- 2027 revenue guidance of €42–45B issued at H2 2026 earnings, supported by sovereign fab programmes (US CHIPS Act, EU Chips Act) adding new demand cohorts
AI-driven data centre demand sustains 20%+ EUV revenue growth into 2028; High-NA hits 30+ annual shipments; margin expansion to 55%+ drives a material earnings re-rating toward 42× NTM.
- Sovereign foundry programmes across the US, Europe, Japan, and Middle East add a new demand cohort on top of TSMC/Samsung/SK Hynix, pulling the 2030 revenue target forward to ~€50B by 2028
- High-NA EUV reaches 30+ annual shipments by end of 2027 at improving unit margins; blended gross margin inflects above 55% ahead of the 2030 target
- AI accelerator demand for 1.4nm and 1nm nodes materialises faster than consensus, doubling ASML's addressable High-NA shipment opportunity and sustaining 25%+ EPS growth through 2028