ASML has 90% market share of advanced AI processor machines.
Data center infrastructure spending is likely to increase by $4 trillion over the next five years, directly benefiting ASML’s equipment sales.
ASML has ongoing recurring revenue opportunities from equipment servicing that can last for decades after a machine is sold.
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Demand for artificial intelligence (AI) infrastructure is driving many stock prices higher, with the Dutch semiconductor machine maker one notable AI company to benefit. ASML Holdings(NASDAQ:ASML). The company’s stock price has soared 57% in the past year, easily outperforming the stock market. S&P 500 IndexThe increase was 17%.
That may not seem like much compared to other AI stocks, but ASML has some key advantages in the very niche AI ​​space that could position the company to benefit from AI in the coming years. Here are a few reasons why investors should consider buying ASML stock now.
Image source: Getty Images.
Many AI companies exist, some of which are far more style than substance. With ASML, investors don’t have to worry about this problem. The company manufactures machines for producing advanced semiconductors and holds 90% of the market share in photolithography machines.
Its extreme ultraviolet (EUV) and high numerical aperture extreme ultraviolet (high NA EUV) machines are in high demand as its customers include TSMC, Samsungand Intel — Purchasing new semiconductor manufacturing equipment to take advantage of a surge in spending on artificial intelligence.
And there’s little need to worry that ASML will soon lose its competitive edge. Research from Morningstar Corporation ASML’s advanced technology is expected to be ten years ahead of its competitors, and coupled with annual R&D investments of approximately €5 billion (approximately $5.9 billion), ASML should be able to easily maintain this competitive advantage.
ASML not only holds a unique position in the field of artificial intelligence; It also benefited from a significant increase in spending on artificial intelligence infrastructure. Every major tech company is increasing spending on AI processors, and that demand is in turn driving spending on ASML machines.
think about it NVIDIAManagement believes spending on AI infrastructure, including semiconductor machinery, will increase to $4 trillion over the next five years. ASML is the clear leader in semiconductor machine manufacturing, and the company is well-positioned to benefit from this growth.
ASML management said there is a backlog of orders for some of its most advanced machines, indicating demand remains high. What’s more, each of the company’s machines generates significant revenue, with revenues of up to €300 million for standard EUV machines and €370 million for high-numerical aperture EUV machines. This means a few orders can start adding a lot of revenue quickly.
In the first nine months of 2025, ASML’s revenue increased by 21% to nearly 23 billion euros, and diluted earnings per share increased by 40% to $17.38 per share. What’s even more impressive is that the company’s gross profit margin has always remained low at around 50%.
When ASML sells a semiconductor machine, it typically lasts 30 years, which may seem like a bad thing for sales, but ASML has an added revenue advantage because it also Serve It sells machines. Can generate significant recurring revenue for the company decades every time it sells a machine.
In the first nine months of 2025, services revenue accounted for 26% of total sales and reached 6 billion euros, an increase of 39% compared to the same period in 2024. This is a good sign that ASML’s services have benefited from the influx of sales of its semiconductor manufacturing equipment.
With ASML’s unique advantage in AI, the company’s 90% market share in semiconductor equipment, and the opportunity to provide ongoing service for the machines it sells, the AI ​​company looks like a quality stock to buy and hold for the next few years.
Before buying ASML stock, consider the following factors:
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Chris Neiger has no position in any of the stocks mentioned. The Motley Fool owns and recommends ASML, Intel, Nvidia and TSMC. The Motley Fool has a disclosure policy.
Is ASML Holdings a buy? Originally posted by The Motley Fool
