Why ASML’s AI Monopoly Is Still Getting Stronger

Summary

ASML NASDAQ: ASML holds a monopoly on foundational AI technology, making it the most structurally sound tech investment you can own. Its Extreme Ultraviolet (EUV) lithography machines are the only ones capable of printing AI-capable circuitry, and they are in high demand. ASML Today$1,785.19 +9.55 (+0.54%) As of 01:43 PM Eastern This is a fair market value price provided by Massive. Learn more.52-Week Range$683.48▼$1,999.96Dividend Yield0.60%P/E Ratio64.02Price Target$1,891.63 Evidence of its strength was seen in the company's Q2 results and guidance update, released July 15. The report highlighted not only demand but also a business model designed for the long term. While new EUV machines are the story today, those sales will cool over time. The long-term opportunity is the persistent upgrade cycle built into the technology, which means software and hardware upgrades and the services to implement them. ASML’s machine bodies are bolted to the floors of semiconductor foundries globally, foundry capacity is expanding rapidly, and each machine body equates to Installed Base volume. As it stands, the Installed Base accounted for 30% of net revenue, growing 11% sequentially and 5% year-over-year, with a wide moat around the business. There is an up-and-coming competitor technology developed by Canon OTCMKTS: CAJPY, but it’s not slated for anything like commercial-scale availability until 2028 and, even then, isn’t truly a viable competitor. Canon’s Nanoimprint technology, which stamps circuits onto silicon, produces similarly fine circuitry but also a much higher error rate, making it unsuitable for advanced computing. ASML Signals Momentum Shift in Lithography MarketsASML had a robust quarter, with revenue growing by 21% in Q2. The topline outpaced the consensus by approximately 450 basis points (bps), on strength in new equipment and upgrades. The company sold 86 new machines, up 28%, while used equipment sales declined. Gross margin, another critical factor, expanded ...