ASML Holding
The Dutch company that builds the machines chipmakers use to print circuits onto silicon, including the only machines able to print the finest ones.
The scores
Growth4/4 ↑
Sales rose from €18.6B in 2021 to €32.7B in 2025, are guided to €44-45B in 2026 and booked through 2028; 2024 stalled.
Business quality4/4 →
The only EUV supplier, by a customer's own filing, with exclusive optics and prices raised into sold-out demand; DUV faces rivals.
Financial position4/4 ↑
Net cash near €10B at September 2026 and €11.3B of operating cash in nine months; debt being repaid.
Execution record3/4 ↑
Beat its January 2026 guide by about €8B of sales and ramped EUV output 50%, but cut the 2025 outlook within a quarter in 2024.
Per share capture3/4 →
Buybacks far exceed share pay and diluted shares fell 8.5% from 2020; €1.3B went into an AI start-up outside the business.
Potential3/4 ↑
Equipment spending is forecast to reach about $200B by 2028 and customers want slots for 2029-30, but nothing past 2028 is accepted.
Risk profile2/4 →
Four customers are 61% of sales, China a fifth under shifting export rules, one optics supplier, and a cyclical buyer base.
Valuation2/4 ↓
About 42 times trailing earnings and 26 times 2027 consensus prices the growth through 2028 with nothing left for a pause.
Evidence quality3/4 →
Statements, mix and concentration are filed and a customer confirms the monopoly; capacity, orders, prices and China rest on management's words.
The Verdict
We rate ASML Neutral. The business is as strong as any we follow: it is the only company that makes the EUV machines every advanced chip needs, its factories are booked through 2028 and it has just raised prices. The trouble is the price. At about 42 times last year's earnings, buyers are already paying for two more years of fast growth, and leave nothing for the pause that has followed every past building boom. China, about a fifth of sales under tightening export rules, adds risk. The view hinges on how long demand outruns supply after 2028. Conviction is medium.
The long caseEvery leading-edge chip needs EUV and only ASML makes it, so as AI pushes chipmakers to build more advanced factories, ASML's machines are the bottleneck.
The evidence under this - 8 claims
In October 2024 ASML cut its outlook on customer caution within a year of a strong order book (C38), so stated demand can move fast.
Part of the increase covers ramp costs in the supply chain, by the CFO's own account, so not all of it reaches the margin.
Trailing earnings lag a business growing 36% a year: on 2026 consensus of €40.94 a share the multiple is about 36.
China's domestic DUV effort is aimed at the same chipmakers (C30), and export rules have already narrowed what ASML may ship there (C31).
Customers want to order for 2029-2030 (C15) and price rises take full effect in 2028 (C16), which argues the plateau lasts longer than past cycles.
The company
ASML builds lithography machines: giant scanners that shine light through a stencil of a chip's circuit onto a silicon wafer, dozens of times per chip. Its most advanced machines use extreme ultraviolet light, and nobody else makes them; Intel says so in its own annual report.
Its customers are the few companies that make chips at scale, such as TSMC, Samsung and Intel. Four of them bought three-fifths of its sales in 2025. The mirrors come from one partner, Zeiss, of which ASML owns a quarter.
The evidence under this - 5 claims
The chief executive said on the Q3 2026 call that Zeiss is not a bottleneck for the capacity expansion (C14), so the single source has not yet limited output.
How it makes money
Most of the money comes from selling machines: in 2025 about €24.5B, split roughly evenly between EUV machines, which cost over €200M each, and older DUV machines for less demanding layers.
The rest, about a quarter of sales, comes from servicing and upgrading the machines already in customers' factories. That business grows as the installed fleet grows and lifts profit when customers pay to make old machines faster.
The evidence under this - 3 claims
Net income includes a €508.8M gain on an equity investment, so the operating line is the cleaner measure (C23).
Where the money comes from, stream by stream
| Stream | Share of sales (FY2025) | How it earns it |
|---|---|---|
| EUV systems (NXE and EXE) | 35.5% | Low-NA and High-NA extreme ultraviolet scanners, sold only by ASML, for the finest layers of leading logic and DRAM. |
| DUV systems | 36.9% | ArF immersion, ArF dry, KrF and i-line scanners for the other layers, against Canon and Nikon. |
| Metrology and inspection | 2.5% | YieldStar and e-beam tools that measure and inspect patterns to widen the lithography window. |
| Installed Base Management | 25.1% | Service contracts, spare parts and productivity upgrades on the more than ten thousand machines in the field. |
Who runs it
Christophe Fouquet became chief executive in 2024 after sixteen years at ASML, where he ran the EUV business, and earlier jobs at KLA and Applied Materials. Roger Dassen has been finance chief since 2018. Together the top five executives own a tiny fraction of the company. Their bonus pays mostly on operating profit per euro of sales, and their shares on returns against other chip stocks, return on capital and technology goals.
The evidence under this - 3 claims
Why it wins, and who could beat it
Why customers come back
EUV took decades of research and an exclusive optics partner to build, and ASML still spends about a seventh of its sales on research. No rival sells one, so every chipmaker at the leading edge must buy from ASML, and has just accepted higher prices on the most critical machines.
The older DUV machines are a different story: Canon and Nikon sell competing ones, and ASML says a weaker yen has made that price competition harder.
The evidence under this - 5 claims
The chief executive said on the Q3 2026 call that Zeiss is not a bottleneck for the capacity expansion (C14), so the single source has not yet limited output.
Part of the increase covers ramp costs in the supply chain, by the CFO's own account, so not all of it reaches the margin.
The threat
The nearest threat is China. Export rules stop ASML selling its best machines there, and a state-backed Shanghai company has begun making its own DUV scanners, though reports say they are far behind ASML's.
Canon also sells a different method that stamps patterns instead of printing them with light; so far it is used for research, not mass production.
The evidence under this - 3 claims
JPMorgan's analysts, quoted in the same report, said a handful of tools is not high-volume manufacturing, where yield, overlay, throughput and reliability decide.
The tool went to a research consortium for prototypes, not to volume production, and ASML's 20-F does not name Canon as a rival outside DUV (C06).
The rivals: all private, in-house or listed abroad.
Who else does this, rival by rival
| Ticker | Rival | Where it competes | How far along | Priced against it |
|---|---|---|---|---|
| Canon nanoimprint lithographyPriced against it: Listed abroad | Lithography systems and their installed base | Announced | Listed abroad | |
| Nikon and Canon DUV scannersPriced against it: Listed abroad | Lithography systems and their installed base | On sale | Listed abroad | |
| Private | Chinese domestic immersion DUV scanners from Shanghai Aishengna, with teams from SMEE and YuliangshengPriced against it: Private | Lithography systems and their installed base | Announced | Private |
How big it could get
How big this could get
ASML sells into chipmakers' spending on factory equipment. SEMI, the industry body, expects that spending to reach $143.9B in 2026, up 23%, and about $200B by 2028, driven by AI chips and memory.
Nobody publishes how much of that goes on lithography machines; ASML's own €24.5B of machine sales in 2025 is the floor.
The evidence under this - 2 claims
SEMI's 2025 year-end forecast for 2026 was markedly lower; the industry body's own forecasts move by large amounts within a year.
Who has signed
Customers had placed orders worth €38.8B at the end of 2025, and the deposits they pay ahead of delivery tripled in the third quarter of 2026. None of these orders is binding in every case, and ASML no longer reports new orders each quarter.
The evidence under this - 3 claims
The results
The numbers
Sales grew 16% in the year to Dec 2025, faster than the 2.6% in the year before.
Operating margin is 35%, up from 31% in the year to Dec 2022.
Running costs take 18¢ of each sales dollar, up from 16¢ in the year to Dec 2021.
Each dollar put into the business earns 39% a year after tax, up from 34% in the year to Dec 2021.
It turned 34% of sales into free cash, EUR 11.1B over the year.
It holds EUR 13.3B of cash against EUR 4.39B of debt, EUR 8.93B more cash than it owes.
The share count fell 5.2% in 4.0 years, and pay in shares costs 0.6% of sales.
All the numbers
Filed figures from the company's 10-K and 10-Q, read 2026-10-18. Fiscal years end in December. In EUR.
| Dec 2021 | Dec 2022 | Dec 2023 | Dec 2024 | Dec 2025 | |
|---|---|---|---|---|---|
| Size and growth | |||||
| Sales | EUR 18.6B | EUR 21.2B | EUR 27.6B | EUR 28.3B | EUR 32.7B |
| Sales growth | +33% | +14% | +30% | +2.6% | +16% |
| Profit | |||||
| Gross margin | 53% | 51% | 51% | 51% | 53% |
| Operating margin | 36% | 31% | 33% | 32% | 35% |
| Net margin | 32% | 27% | 28% | 27% | 29% |
| What growth costs, per sales dollar | |||||
| Research and development | 14% | 15% | 14% | 15% | 14% |
| Selling, general and admin | 3.9% | 4.5% | 4.0% | 4.1% | 3.9% |
| Pay in shares | 0.6% | 0.3% | 0.5% | 0.6% | 0.6% |
| Capital spending | 4.8% | 6.1% | 7.8% | 7.3% | 4.8% |
| Cash | |||||
| Cash from operations | EUR 10.8B | EUR 8.49B | EUR 5.44B | EUR 11.2B | EUR 12.7B |
| Free cash flow | EUR 9.95B | EUR 7.21B | EUR 3.29B | EUR 9.10B | EUR 11.1B |
| Balance sheet | |||||
| Cash and short-term investments | EUR 7.59B | EUR 7.38B | EUR 7.01B | EUR 12.7B | EUR 13.3B |
| Debt | EUR 4.58B | EUR 4.26B | EUR 4.63B | EUR 4.69B | EUR 4.39B |
| Net cash | EUR 3.01B | EUR 3.12B | EUR 2.38B | EUR 8.05B | EUR 8.93B |
| Returns and shares | |||||
| Return on capital | 34% | 40% | 49% | 36% | 39% |
| Shares (diluted) | 410M | 398M | 394M | 394M | 389M |
What growth costs
For five years growth did not make ASML more profitable: research and running costs rose slightly faster than sales, so its profit on each euro of sales slipped. In 2026 that changed, as sales jumped far faster than costs. Whether it holds depends on the price rises landing.
The evidence under this - 3 claims
R&D is a choice to fund High-NA and the next tools rather than a cost of each sale; ASML could have shown more leverage by spending less.
The 2024 stall came with bookings falling, not with a lost customer, and sales grew 15.6% the next year (C38, C12).
The last report (14 Oct)
Quarter ended September 2026, filed figures.
The quarter to September 2026 was ASML's biggest yet. Sales rose 55% from a year earlier to €11.7B and it kept 57.5 cents of gross profit on each euro, a record, as customers bought EUV machines and paid for upgrades. ASML raised its sales forecast for 2026 for the third time.
Management added that its planned output in 2027 and 2028 will still not meet demand. Profit also included a one-off gain on its stake in Mistral AI.
What it did to the thesisIt proved demand runs well ahead of supply and that ASML can raise prices, which supports the business case. It did nothing to the price question the view hinges on, and left open how much of the boom lasts beyond 2028.
The quarter in detail
Sales growth from the previous quarter, filed figures.
Earnings per share $14.47 against $12.18 expected.
The evidence under this - 5 claims
Net income includes a €508.8M gain on an equity investment, so the operating line is the cleaner measure (C23).
Management said the fourth-quarter gross margin dips on ramp costs, and that 2027 also carries ramp costs in ASML and its suppliers (C16).
In October 2024 ASML cut its outlook on customer caution within a year of a strong order book (C38), so stated demand can move fast.
What management did with the money
ASML spends most of its spare cash on buying back shares and paying dividends: almost €6B of buybacks in 2025 and more than that in the first nine months of 2026, while also repaying debt. It also put €1.3B into Mistral AI, a French AI start-up.
The evidence under this - 3 claims
The price, and where we disagree
In short. Full. The price pays for ASML's earnings to keep climbing through 2028 as analysts expect; it does not pay for a slowdown, and there is little left over if one comes.
The shares rose about 63% over the past year, much faster than sales per share, then slipped from a June peak after reports of China's own scanners and again after the latest results.
Two tests are close. On 10 November 2026 a US-China truce on trade rules lapses unless it is extended. On 27 January 2027 ASML gives its first view of 2027, which shows whether growth and the higher prices carry into next year.
The evidence under this - 5 claims
JPMorgan's analysts, quoted in the same report, said a handful of tools is not high-volume manufacturing, where yield, overlay, throughput and reliability decide.
Management said the fourth-quarter gross margin dips on ramp costs, and that 2027 also carries ramp costs in ASML and its suppliers (C16).
How we read the multiple
Buyers pay about 42 times ASML's earnings over the past year, against a six-year normal near 36. On what analysts expect for 2027 it is about 26 times, so the price is already paying for earnings to rise by about three-fifths in two years.
That is possible: the factories are full and prices are rising. But it leaves no room for the pause that followed past building booms.
Against its own history. Dearer than ASML's own normal, after a year in which the shares rose faster than the business.
The evidence under this - 4 claims
Trailing earnings lag a business growing 36% a year: on 2026 consensus of €40.94 a share the multiple is about 36.
Customers want to order for 2029-2030 (C15) and price rises take full effect in 2028 (C16), which argues the plateau lasts longer than past cycles.
Priced against its rivals
None of the listed rivals above sells the same thing to the same buyers as a large part of what it does. A price comparison needs at least two, so the price is judged against its own history instead.
Private or foreign rivals that cannot be priced: Canon Inc., Nikon Corporation, Shanghai Micro Electronics Equipment (SMEE) and SiCarrier.
Where we disagree with the market
An irreplaceable AI tool maker, sold out for years, whose earnings will keep beating forecasts.
The next two years are strong and already priced; what comes after 2028 is the open question.
Most analysts are positive and expect earnings to keep beating forecasts as ASML adds capacity and raises prices. We agree on the next two years, but they are already in the price.
The market may be right if customers lock in orders for 2029 and 2030 at the higher prices. Against that, ASML cut its forecast within a quarter in 2024 when chipmakers outside AI paused.
What analysts say, and the evidence
The evidence under this - 6 claims
Trailing earnings lag a business growing 36% a year: on 2026 consensus of €40.94 a share the multiple is about 36.
Customers want to order for 2029-2030 (C15) and price rises take full effect in 2028 (C16), which argues the plateau lasts longer than past cycles.
In October 2024 ASML cut its outlook on customer caution within a year of a strong order book (C38), so stated demand can move fast.
ASML no longer reports bookings, so the order flow behind these statements cannot be checked quarter by quarter (C17).
What could go wrong, and how we would know
The risks
- China rules tighten China is about a fifth of sales; a US bill or a Dutch rule could bar the DUV machines it still buys.
- China builds its own A state-backed company has begun making DUV scanners for China's largest chipmakers, though they are far behind ASML's.
- A few big customers Four chipmakers bought three-fifths of 2025 sales; one cutting its building plans moves ASML's whole year.
- One optics supplier Every mirror and lens comes from Zeiss; any problem there would stop ASML's factories.
- The building cycle turns Chipmakers buy in waves; in 2024 orders halved within a quarter and sales stalled for a year.
The evidence under this - 6 claims
China's domestic DUV effort is aimed at the same chipmakers (C30), and export rules have already narrowed what ASML may ship there (C31).
JPMorgan's analysts, quoted in the same report, said a handful of tools is not high-volume manufacturing, where yield, overlay, throughput and reliability decide.
The chief executive said on the Q3 2026 call that Zeiss is not a bottleneck for the capacity expansion (C14), so the single source has not yet limited output.
What we still do not know
- How much of 2027 and 2028 output is already ordered, and at what prices, now that ASML no longer reports orders.
- How much of China's buying is the DUV machines that new rules could reach.
- Whether ASML will enter chip packaging with a hybrid bonding tool, which it has said it is studying.
- How fast Canon's stamping method moves from research towards mass production.
The evidence under this - 4 claims
ASML no longer reports bookings, so the order flow behind these statements cannot be checked quarter by quarter (C17).
China's domestic DUV effort is aimed at the same chipmakers (C30), and export rules have already narrowed what ASML may ship there (C31).
The tool went to a research consortium for prototypes, not to volume production, and ASML's 20-F does not name Canon as a rival outside DUV (C06).
What would change our view
- Neutral→AttractiveEarnings catch up with the price
It needs all of:
- ○The shares cost about 30 times trailing earnings, down from about 42, whether earnings rise or the price falls.about $1,166.96 today, 29% below the last close
- ○Sales for 2027 still grow at least 20%.checked at the next results, due by 27 Jan
- Neutral→AttractiveThe plateau proves longer than the cycle
It needs all of:
- ○ASML guides a gross margin of 58% or more for 2027, up from about 56%.checked at the next results, due by 27 Jan
- ○ASML says it has accepted orders for delivery in 2029.watched as it happens
- Neutral→UnattractiveThe cycle turns or China closes
It needs any of:
- ○Quarterly sales fall below the same quarter a year earlier.checked at the next results, due by 27 Jan
- ○A rule bars ASML from selling or servicing DUV immersion machines in China.watched as it happens
We would also be wrong if
- A second company ships an EUV-class or stamping machine into mass production at a leading chipmaker.
What is coming
- 10 November 2026 US Affiliates Rule and China's rare-earth export limits come off suspension: Whether the US-China trade truce is extended, which decides how many of ASML's Chinese customers fall under US rules.
Every dated event ahead
- 10 November 2026 US Affiliates Rule and China's rare-earth export limits come off suspension: Whether the US-China trade truce is extended, which decides how many of ASML's Chinese customers fall under US rules.
- 27 January 2027 Q4 2026 results and the first view of 2027: 2027 growth and gross margin, and how much of the price rise lands in the first year.
- 10 June 2027 Capital Markets Day: ASML's new view of 2030 sales and margins, replacing the €44-60B range 2026 has already reached.
Since we wrote this
- 18 OctThesis writtenNeutral, medium convictionThe only EUV supplier, sold out to 2028 with prices rising; the price already pays for those years.
Sources 14
Sources - 14
Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.
- S01primarycompany filing2026-02-25business, systems by technology and end use, customers and geography, competition, Zeiss, export controls, statements, remaining obligations, buybacks, management, ownership and paybacksC01C02C03C04C05C06C08C17C23C24C25C26C27C31C35C38
- S02primarycompany release2026-01-28Q4 2025 bookings and backlog, the January 2026 guide, the end of bookings reportingbacksC12C17
- S03primarycompany release2026-10-14Q3 2026 results, the Q4 and full-year 2026 guide, buybacks and dividendbacksC09C11C12C24
- S04primarycompany filing2026-10-14quarterly income statements, balance sheets and cash flows from Q3 2025 to Q3 2026backsC09C10C23C24C33C34
- S05primarycompany release2026-10-14the 2026 mix by technology and end use, and the date of the next Capital Markets DaybacksC13C18
- S06primarytranscript2026-10-14Q3 2026 earnings call transcript (FMP)data/cache/transcripts/ASML-2026Q3.jsonoutput and capacity plans, orders for 2028-2030, price increases, China, High-NA adoption, down payments
we now anticipate that our current planned levels of output in 2027 and 2028 will not fully meet the demand of our customers.
backsC11C13C14C15C16C19C29C34 - S07primarycompany release2024-11-14the 2030 sales and gross margin range and its market assumptionsbacksC18
- S08primarycompany filing2026-01-23a customer naming ASML as sole supplier of EUV tools and the cost of their delaybacksC07
- S09primaryindustry data2026-07-14wafer fab equipment spending for 2025-2028, by application and region
the Wafer Fab Equipment (WFE) segment, which includes wafer processing, mask/reticle, and fab facilities equipment, is projected to increase 23.1% to $143.9 billion in 2026.
backsC28 - S10primarycompany release2024-09-26Canon: FPA-1200NZ2C nanoimprint lithography system delivered to the Texas Institute for Electronics 7751.Twhat nanoimprint does, its resolution and where the first system went
the new system enables patterning with a minimum linewidth of 14 nm, equivalent to the 5 nm node that is required to produce most advanced logic semiconductors currently available.
backsC32 - S11secondarynews2026-07-28who is building China's immersion scanners, how many, for whom, and how far behind
Aishengna's DUV machine is expected to require further testing and remains far from matching the Dutch firm's competing models, the source said.
backsC30 - S12primaryregulator2023-10-25US controls on advanced immersion lithography and EUV items, and Japan's matching control
The Government of Japan added ArF-wet lithography equipment and other advanced semiconductor manufacturing equipment to its control list for all regions on July 23, 2023.
backsC31 - S13secondaryvendor data2026-10-18Research pack (FMP market data, FINRA short interest, filed headcount), frozencontent/ASML/research-pack.jsonprice history on Nasdaq and Euronext, valuation history, analyst ratings and estimates, price targets, short interestbacksC20C22C39
- S14primarycompany release2024-10-15Q3 2024 bookings, the cautious outlook and the 2025 rangebacksC38