In the vast tech ecosystem, one under-the-radar titan powers the future of nearly every major chipmaker: ASML Holding (ASML). Far more than just a semiconductor equipment supplier, ASML is a technological gatekeeper, a geopolitical linchpin, and arguably one of the most overlooked long-term growth stories in public markets.
Despite ongoing concerns around industry cyclicality and China-related headwinds, ASML continues to solidify its dominance in a space where it faces virtually no actual competition. As 2026 draws nearer, investors may want to tune out the noise and focus on what’s unfolding beneath the surface—a company poised to enter a fresh multi-year growth phase, fueled by its unmatched “NA EUV” technology and a rising tide of national semiconductor reshoring efforts. I remain bullish on ASML, as the company is still in the early stages of commercializing its core offering.
The Monopoly Beneath the Silicon Curtain
Let’s begin with what might be the most open secret in tech: ASML has no true rivals when it comes to extreme ultraviolet (EUV) lithography. None. It is the sole manufacturer of these incredibly complex machines, which are essential for producing chips at the most advanced process nodes. Whether it’s the cutting-edge processors powering AI data centers or flagship smartphones, chances are they were built using ASML’s EUV technology.
Silicon Wafer during the photolithography process.
These machines don’t come cheap. A single EUV scanner can cost upwards of $200 million, contains over 100,000 precision-engineered parts, and takes more than a year to assemble. Yet, chipmaking giants like TSMC (TSM), Intel (INTC), and Samsung (SSNLF) have no alternatives—they simply queue up and wait.
That exclusivity has allowed ASML to build a massive moat, not through pricing power alone, but through an unmatched technological lead. Even deep-pocketed rivals like Nikon ($NINOY, $NINOF) and Canon (CAJPY) have exited the EUV race entirely. ASML doesn’t just lead the market—it is the market.
ASML Holding (ASML) Similar Stocks
Concerns about export restrictions, particularly involving China, have surfaced in recent quarters. While it’s true that China accounted for 29% of ASML’s 2023 revenue, no EUV machines have ever been shipped there. The tighter Dutch export controls—largely encouraged by U.S. pressure—mainly apply to high-end DUV tools. Though valuable, these sales were never the cornerstone of ASML’s long-term strategy.
Instead, ASML is increasingly aligned with Western and Taiwanese industrial priorities, shifting its geopolitical exposure toward greater long-term stability. What was once viewed as a liability has now become a strategic recalibration—one that positions ASML to thrive at the intersection of technology leadership and national security imperatives.
An Unsuspecting Subscription Machine
What remains undercounted and underestimated with ASML is how much their business behaves like a high-end service platform. With over 1,500 tools installed globally, ASML’s installed base garners a steady stream of recurring revenues from a combination of long-term service contracts, field upgrades, and performance enhancements. In 2024, approximately 23% of total revenue was generated from these activities, and I anticipate that number to rise.
ASML Holding (ASML) revenue by segment
This implies that ASML is no more a cyclical, lumpy machinery business, but rather a capital equipment company with platform-like economics. This means big upfront average selling prices with decades of sticky, high-margin service revenue to follow. That flywheel will only be stronger with High-NA systems in the field. Once ASML’s tools are deployed in a manufacturing facility, they become mission-critical and highly profitable to service and maintain.
The Market Is Miscalculating ASML
The market appears to be pricing ASML as a cyclical capital expenditures name rather than a structural enabler of Moore’s Law. Despite a monopoly-like economic structure, ASML currently trades at approximately 30x forward earnings, with a PEG of just under 1.5 and a free cash flow yield of around 3%. Therefore, the stock price is reasonable—and I’d say cheap—for a company with this kind of visibility, pricing power, and strategic relevance.
ASML Holding (ASML) estimated and reported earnings history
The only thing investors need to make this investment work out is patience, perseverance, and a tolerance to withstand geopolitical risks. I understand that the markets are fraught with tension due to the China-U.S. relationship surrounding semiconductors, but I’m bullish on reconciliation soon and a peaceful path to coexistence. As such, I’m staying invested despite the current market trepidation.
Is ASML a Buy, Sell, or Hold?
According to analysts, ASML has a consensus Strong Buy rating based on three Buys, zero Holds, and zero Sells. The average ASML stock price target is $905, implying a ~21% upside over the next 12 months. I’m more bullish and could easily see the stock trading at $1,100 as macro strength creates investor confidence. Easing tensions between China and the U.S. would signal to markets that it is safe to begin allocating capital fearlessly again in both the East and the West.
ASML: The Silent Powerhouse Driving the Future of Chipmaking
ASML is a stealthy compounder with an unbreakable technology moat. While others sell grand visions, ASML builds the reality behind them. It’s indispensable in the chipmaking ecosystem, boasting resilient economics and technology that’s far ahead of the pack.
By 2026, investors are poised to see substantial returns as high-NA EUV moves from pilot to full production, sovereign chip foundries ramp up in the U.S. and Europe, and service revenues continue to scale rapidly.
ASML offers a powerful blend of secular growth and strategic tailwinds—yet the market still prices it at a discount, for now. If you haven’t been paying attention, now is the time. This is the company that makes the entire chip world possible. Quiet, relentless, and precise, ASML leads the way behind the scenes.
