ASML Holding
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. Q2 2026 Installed Base Management revenue hit €2.8B as the installed base expands and customers pay for high-margin performance upgrades to extract more output — the upside surprise in Q2 came primarily from these high-margin service sales. AI-driven chip demand accelerated capacity buildouts, prompting a second full-year 2026 guidance raise to €43–45B (from €36–40B in Q1, +16% at the midpoint); ASML is now nearly fully booked on Low-NA EUV for 2027 and is lifting Low-NA capacity ~30% in 2026, with another ~30% under investigation for 2028. Memory-related system sales are guided to grow >75% in 2026 as DRAM/HBM customers expand aggressively.
Moat 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.
89.3 resilient · 100.0 vulnerable · 80/20 = 91.4 · + 1 strength · = 92
Open a moat to read its note.
ASML sells precision lithography hardware to chip fabricators, not UI-based software.
to extreme ultraviolet lithography physics and optics manufacturing.
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.
ASML's monopoly is technological, rated under proprietaryData, transactionEmbedding and systemOfRecord — not a licence that keeps rivals out. Dutch and US export controls (Wassenaar dual-use classification, the 2026 revocation of Chinese VEU exemptions, no EUV to China) restrict ASML's own sales: a headwind to China demand, not a regulatory moat. Previously strong, which scored a restriction on ASML as protection for it.
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.
The monopoly is technological (EUV), rated under regulatoryLockIn, proprietaryData and embedding; volume does not create a separate cost lead.
Buyers are enterprises choosing on switching cost, integration and performance, which the other pillars rate. The name carries reputation, not a price premium it could hold on brand alone.
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
Q2 2026 revenue of €9.3B beat consensus (~€8.8B, +21% YoY) with gross margin of 54.0% and net income of €2.9B (EPS €7.59), driving a second full-year guidance raise to €43–45B — a +16% lift at the midpoint from the €36–40B set only a quarter earlier, and roughly +36% YoY on 2025's ~€32B. Q3 2026 is guided to €11–12B at a 55–57% gross margin. Korea was the top market at 43% of Q2 system sales on the memory/HBM ramp; China held at ~20% for the year. The Q2 upside came primarily from high-margin Installed Base Management (€2.8B). ASML expects memory-related system sales to grow >75% in 2026, is nearly fully booked on Low-NA EUV for 2027, and is raising Low-NA capacity ~30% in 2026 with another ~30% under study for 2028. The counter-signal for the score: two guidance raises in six months pull the €44–60B 2030 target forward — 2026 already reaches the low end — so while near-term growth is explosive, the blended 3–5yr CAGR flattens off a much higher base and the 2027–28 digestion air-pocket, if AI capex plateaus, is now deeper. Q2 2026 remains the latest reported quarter (Q3 reports in mid-October).
Valuation Score
Re-marked at the $1,743.94 close on September 25, 2026 (the last IM25 mark before the rebalance): 73 on the unchanged $1,300 / $1,950 / $2,750 ladder, from 70 at the $1,823 reference the text below was written at. Only the price moved; the ladder and the thesis are not re-underwritten here. At ~$1,823 (July 16, 2026, a fresh all-time high) ASML popped ~5% on the Q2 print — but that is a muted reaction to a +16% guidance raise, so on fundamentals the stock arguably de-rated: the earnings base rose faster than the price. Against scenarios lifted to reflect the €43–45B guide (base $1,950, bear $1,300, bull $2,750), the live price now sits between bear and base for a valuation score of 70, modestly better than June's ~65 despite the higher absolute price. The margin of safety is partial rather than gone — the raised guidance and a 2027 order book that is nearly full restore some cushion — but the stock still discounts flawless execution of the capacity ramp while the AI-capex digestion risk stays live. Forward P/E of ~40× sits just below ASML's 5-year 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. Q2 2026 Installed Base Management revenue hit €2.8B as the installed base expands and customers pay for high-margin performance upgrades to extract more output — the upside surprise in Q2 came primarily from these high-margin service sales. AI-driven chip demand accelerated capacity buildouts, prompting a second full-year 2026 guidance raise to €43–45B (from €36–40B in Q1, +16% at the midpoint); ASML is now nearly fully booked on Low-NA EUV for 2027 and is lifting Low-NA capacity ~30% in 2026, with another ~30% under investigation for 2028. Memory-related system sales are guided to grow >75% in 2026 as DRAM/HBM customers expand aggressively.
Moat 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.
89.3 resilient · 100.0 vulnerable · 80/20 = 91.4 · + 1 strength · = 92
Open a moat to read its note.
ASML sells precision lithography hardware to chip fabricators, not UI-based software.
to extreme ultraviolet lithography physics and optics manufacturing.
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.
ASML's monopoly is technological, rated under proprietaryData, transactionEmbedding and systemOfRecord — not a licence that keeps rivals out. Dutch and US export controls (Wassenaar dual-use classification, the 2026 revocation of Chinese VEU exemptions, no EUV to China) restrict ASML's own sales: a headwind to China demand, not a regulatory moat. Previously strong, which scored a restriction on ASML as protection for it.
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.
The monopoly is technological (EUV), rated under regulatoryLockIn, proprietaryData and embedding; volume does not create a separate cost lead.
Buyers are enterprises choosing on switching cost, integration and performance, which the other pillars rate. The name carries reputation, not a price premium it could hold on brand alone.
Growth Analysis
Growth Drivers
Key Risk
Hyperscaler AI capex digestion, now off a higher base: the two 2026 guidance raises lift the run-rate to a ~€44B/€11–12B-per-quarter pace, so if any two of Microsoft, Meta, Alphabet, Amazon, or Oracle cut FY2027 capex guidance by >15% in their H2 2026 earnings, TSMC and SK Hynix would defer EUV deliveries into 2027–28 against tougher comparisons — a deeper air-pocket than a quarter ago because more 2030 demand has been pulled forward. That would compress the forward multiple from ~40× toward the semi-cyclical norm of ~25×, a scenario made more probable by SOX trading well above its 200-day MA and CAPE at dot-com-peak readings
Score Derivation
75.7 base + 3.0 trajectory + 4 margin − 5 risk = 78
Base 75.7 (10–14% CAGR, midpoint 12%, measured from the raised FY2026 base of ~€44B rather than from 2025) + 3.0 trajectory (EUV, memory and Installed Base Management accelerating, logic stable: 3 / 4 × 4) + 4 margin expanding (reported GM 53.0% in Q1 → 54.0% in Q2; FY guide 54–56%, Q3 55–57%) − 5 moderate risk (a deeper 2027–28 digestion air-pocket from demand pull-forward). Severity kept at moderate, as set earlier today, to match KLAC, TSM and ANET on the same hyperscaler-capex digestion risk — a lithography monopoly with 2027 Low-NA nearly fully booked is among the least exposed names in the cohort. The CAGR moves down from 13–18% because that band was answerable to neither the 2026 base nor the 2030 range. The Korea/China share line is replaced by logic system sales — a regional share is a bounded mix ratio, not a revenue line = 78
Price Scenarios (12–24 Months)
Valuation Multiples
| Trailing P/E (GAAP) | ~62× |
| Forward P/E (NTM) | ~40× |
| PEG Ratio | ~1.8× |
| Price / Sales (NTM) | ~14× |
| Price / FCF | ~80× |
At ~40× forward P/E after the Q2 pop, ASML trades just below its own 5-year average of ~45× and at a premium to the semiconductor sector median of ~25×, reflecting the unmatched EUV monopoly. Because the €38B→€44B guidance raise outpaced the ~5% share move, the forward multiple actually compressed versus June — the PEG of ~1.8× is marginally cheaper than a quarter ago while still requiring ~22% EPS CAGR through 2027 to hold with no multiple compression, which the High-NA ramp, memory (+75%) mix, and a nearly-full 2027 order book make plausible. The gap between trailing (~62×) and forward (~40×) still signals sharp earnings acceleration as High-NA and memory contribute — structurally bullish, but offset by the rising probability of an AI-capex digestion event compressing the whole semi-equipment multiple toward the cyclical norm of ~25×, an air-pocket made deeper by the demand that has been pulled forward.
Approximate figures as of July 2026 (price ~$1,823, post-Q2).
Where We Are vs Targets
Loading live price…
AI capex plateaus into 2027 just as ASML ships at a ~€44B run-rate — the pulled-forward demand becomes a 2027–28 air-pocket, EPS stalls near €32 and the multiple compresses to ~28× on earnings uncertainty. Floor is higher than a quarter ago because the 2027 Low-NA book is nearly full.
- Hyperscaler AI infrastructure spending decelerates materially in H2 2026–H1 2027, reducing TSMC and SK Hynix capital expenditure plans and deferring EUV deliveries into a tougher post-raise comparison base
- US/EU tighten DUV immersion export controls further, removing the remaining ~20% China revenue with no near-term geographic offset
- High-NA EUV gross margins stay below 50% through 2027, capping blended gross margin near 54% and pushing 2027 EPS consensus toward €32 as the memory ramp normalises
The raised 2026 guidance (€43–45B, 54–56% GM) is delivered; memory system sales grow >75%; the nearly-full 2027 Low-NA book and ~30% capacity add carry revenue toward €50B in 2027, sustaining ~22% EPS growth and a ~40× NTM multiple.
- 2026 revenue lands in the €43–45B guided range with gross margin at 54–56%; Korea/memory demand more than offsets the structural ~20% China cap
- High-NA scales toward 4–5 recognised systems in 2026 and a steeper 2027 ramp (Intel 18A in volume), improving ASP mix and pushing gross margin toward 56%
- 2027 revenue guidance of ~€48–52B issued at H2 2026 earnings, backed by the near-full Low-NA order book, the ~30% capacity expansion, and sovereign fab programmes (US CHIPS Act, EU Chips Act)
AI and memory demand sustain 20%+ EUV revenue growth into 2028; High-NA scales on Intel 18A / 14A and leading-edge logic; margin expansion above 57% drives an earnings re-rating toward 42× NTM as the €44–60B 2030 target is pulled forward to ~2028.
- 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 €44–60B 2030 revenue target forward to ~€55B by 2028
- High-NA EUV reaches 20+ annual shipments by 2028 at improving unit margins; blended gross margin inflects above 57% ahead of the 2030 target
- AI accelerator and HBM demand for 1.4nm/1nm nodes materialises faster than consensus, doubling ASML's addressable High-NA opportunity and sustaining 25%+ EPS growth through 2028