ASML Holding N.V. ASML
ASML makes chipmaking machines, but the stock looks too expensive after rising 75% in the last 12 months.
Verdict: Hold. Not reliably valued: too uncertain to value; our methods support $791-$1,251 a share against a price of $1,867 on 3 Oct 2026. Business quality A (A best, E weakest).
In plain words
What it is: ASML builds advanced lithography machines that print tiny patterns on computer chips. It sells these systems and maintenance services to global chipmakers. Customers pay per machine and sign long-term service contracts.
Profit: The business is very profitable, turning 30% of sales into net profit in the last 12 months. Its profit margin after production costs was 53% in the last 12 months.
The price: The price assumes free cash flow will grow 58% each year for ten years.
Our call: Hold, low confidence: the stock price assumes much faster cash growth than the business has produced recently.
Main risks
- Governments could tighten export bans on machine sales to China. China generated 29% of sales in fiscal 2025, so stricter rules would hurt revenue.
- A few giant chipmakers buy most of the advanced systems. If one large customer delays orders, machine sales and profits could drop quickly.
- Customers might delay adopting costly next-generation High-NA tools. Slower adoption would reduce future machine sales and hold back revenue growth.
What to watch
- New trade rules or export limits on machine shipments to China.
- Quarterly results announced on the next earnings date.
- Shipment numbers for advanced extreme ultraviolet lithography systems.