This article first appeared on GuruFocus.
Analysts and investors are increasingly focused on ASML (NASDAQ:ASML) as the company enters a critical phase of the semiconductor cycle tied to artificial intelligence investment. Under Chief Executive Officer Christophe Fouquet, who took the role in 2024, management has continued to emphasize deep technical engagement with customers, an approach rooted in Fouquet’s early career decision to step into a more junior role to fully understand ASML’s machines. Those systems remain essential for manufacturing the most advanced chips used by companies such as Nvidia and Apple, which in turn support AI workloads for players including OpenAI and Microsoft. Market participants suggest ASML’s unique position at the top end of lithography could support further growth if AI-related capital spending continues, although recent volatility in Nvidia’s valuation has introduced some caution around the durability and timing of returns from that spending.
ASML is benefiting from a combination of long-term semiconductor demand growth and a sharper AI-driven acceleration that followed the debut of ChatGPT in 2022. The company’s revenue is on track to rise about 15% this year to 32.5 billion, with profit projected to increase 27% to 9.6 billion, while shares are up roughly 40% year to date, lifting market capitalization to around $430 billion. Analysts note that additional upside could come from customers building new fabrication facilities outside Asia as governments encourage geographic diversification, which may require more ASML tools. At the same time, investors are watching whether chipmakers follow through on clean-room expansion plans, as this capacity buildout remains a key variable for longer-term demand.
Looking ahead, analysts view the transition from existing extreme ultraviolet lithography to High NA EUV as a central part of ASML’s next growth chapter. Customers including Intel are already testing the new machines, with ASML working alongside them to improve system maturity and uptime ahead of potential high-volume manufacturing in 2027 and 2028. Beyond that, the company has begun research on Hyper NA technology. Geopolitical factors also remain in focus, particularly restrictions on sales of advanced tools to China, which management has said could remain a source of tension over time. Overall, investors see ASML as well positioned within the AI-driven semiconductor landscape, while acknowledging that execution, customer spending discipline and geopolitical developments could shape outcomes over the coming years.