The Dutch equipment manufacturer is known to have a genuine technological monopoly—that of extreme ultraviolet lithography machines—which no competitor has been able to challenge - at least for the moment.
Used by all major processor manufacturers—including TSMC and Samsung, which together account for a good half of ASML's revenue—the Dutch company's machines contain nearly half a million individual parts.
These sophisticated assemblies of precision optics, high-power lasers, ultra-stable mechanical systems, and extreme vacuum technology can fetch prices of up to $350m; their sale is also conditional on the customer's acceptance of regular price increases to offset inflation.
Nothing is certain about the future, except that computing power requirements will continue to increase. In this respect, ASML is of course perfectly positioned to take advantage of this long-term trend. This too is well known.
The last decade has already been a prosperous one, with the group almost quintupling its sales and earnings per share over the period, while returning nearly €35bn to its shareholders in share buybacks and dividends. Its market capitalization has soared as a result.
However, the Chinese issue remains central, indeed thorny. In the crosshairs of the US authorities, the Middle Kingdom is still expected to account for 42% of ASML's deliveries this quarter, which means that the Dutch company's dependence on China remains acute.
Added to this are the uncertainties of a heavy industry that is inherently cyclical. This quarter, ASML sold half as many systems as it did at the same time last year; although, on a more reassuring note, its order book continues to evolve in line with its average over recent years.
The slowdown in growth is reflected in revenue, which is lower than in the last two quarters and comparable to the same period last year, as well as in operating profit, which has continued to hover around €2.5bn per quarter since that time.
ASML says that the slowdown in China is the cause of this stagnation after two or three years of unusually high order volumes. Unfortunately, this trend could continue, judging by the cryptic statement by ASML CEO Christophe Fouquet, who said he "does not expect revenue in 2026 to be lower than in 2025."
The group's grand strategic plan reflects this wide range of scenarios and results. By 2030, it expects to achieve revenues of between €44bn and €60bn, roughly double those achieved in 2025.
Following a model widely shared by MarketScreener analysts, and assuming that ASML can maintain the pace of its share buybacks, JPMorgan analysts estimate that this could translate into EPS of between €36 and €65 by that date. As we can see, the current valuation therefore reflects a rather robust optimism.
This optimism is clearly not shared by the Dutch company's third-largest shareholder: Capital Research has sold 29 million shares in recent weeks, representing over two-thirds of its stake. However, this strong selling pressure has not prevented the share price from rising significantly, a sign that investor demand remains strong despite everything.
In September, ASML acquired an 11% stake in French AI champion Mistral, valued at €12bn in its latest funding round. A few days earlier, US company Anthropic—Claude's parent company and OpenAI's competitor—raised $13bn at a valuation of $183bn.
