ASML’s EUV monopoly and growing order backlog outweigh proposed China export curbs that hit its stock. Savvy investors should buy every dip as AI demand ensures any setbacks are temporary and give traders a chance to buy more.
The AI surge has every chipmaker racing to build capacity for the next wave of accelerators. Yet one company sits at the center of it all, supplying the only machines capable of etching circuits at the scale AI demands: ASML Holding (ASML). While headlines create volatility, the data shows its position remains unassailable.
Every dip hands you a lower entry into the one indispensable player in the supply chain. Let’s dive into the figures and see why this monopoly turns temporary setbacks into buying opportunities.
ASML’s EUV Monopoly Powers Every Major Fab
ASML holds a 100% market share in extreme ultraviolet lithography systems – the sole production-ready technology for chips at 7 nanometers (nm) or smaller. No rival, including Nikon or Canon, offers anything comparable.
That edge drove 2025 total net sales to 32.7 billion euros, a 15.6% rise from the prior year, with basic earnings per share at 24.73 euros, up 28.5%. Gross margin reached 52.8%. In plain terms, every advanced logic and high-bandwidth memory die from Taiwan Semiconductor Manufacturing (TSM), Intel (INTC), Samsung, or SK Hynix starts with ASML equipment.
Customer Orders Lock In Revenue Through 2027
Chipmakers refuse to wait for delivery slots that stretch 12 to 18 months. SK Hynix disclosed on March 24 a purchase of 11.95 trillion won – roughly $8 billion – in EUV tools, enough for about 30 machines by December 2027. Samsung is reportedly planning to secure roughly 20 EUV systems valued near $4 billion for its Pyeongtaek P5 fab. These commitments helped deliver 13.2 billion euros in new orders and lifted the backlog to 38.8 billion euros.
Management guides 2026 revenue between 34 billion and 39 billion euros, with gross margins at 51% to 53%. That’s concrete visibility that extends well beyond one year.
China Restrictions Create Dips – Demand Makes Them Temporary
Granted, a proposed U.S. Congress measure that could further restrict sales and servicing of DUV immersion tools to China – the first expansion since September 2024. Shares pulled back on the report as China accounts for roughly 20% of the 2026 sales forecast.
Citi analysts viewed the prospect negatively. JPMorgan’s Sandeep Deshpande estimated up to a 10% EPS reduction, while Degroof Petercam’s Michael Roeg projected single-digit percentage sales pressure. Yet offsets emerge quickly.
Increased orders from U.S. and allied customers more than compensate, as the AI race forces foundries to secure capacity now. In any case, history shows such restrictions spark volatility that fades once backlog data rolls in.
Key Takeaway
When all is said and done, ASML’s monopoly, 12 billion euro share-buyback program through 2028, and trajectory toward 56% to 60% gross margins by 2030 make every dip a chance to own the AI supply chain’s essential link.
Buy ASML on weakness, and watch next week’s Q1 results for order updates. Smart investors who act secure compounding returns no matter how the headlines shift.
— Rich Duprey
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Source: Money Morning
