Technology Select Sector

S&P 500

The Cannibal

Comparable Companies - ASML

No open-market insider trades were reported in the last 12 months. BlackRock, Inc. reported a 6.7% stake via a Schedule 13G/A filing. Institutional holdings data shows 387,600,000 diluted shares outstanding. Short interest as of 2025-12-15 was 1,208,217 shares, representing 0.3% of the float.

The securities were acquired and are held in the ordinary course of business and were not acquired for the purpose of changing or influencing the control of the issuer.

Christophe D. Fouquet

Roger J. Dassen

Frederic J. Schneider-Maunoury

Wayne R. Allan

James Koonmen

Nils Andersen

Annet Aris

Birgit Conix

Mark Durcan

Warren East

Robert S. M. L. van Leen

Patricia L. M. M. R. van Eetvelt

W. A. Pelsma

J. B. M. Streppel

Christophe D. Fouquet's tenure as President and CEO, beginning in April 2024, is marked by his extensive internal experience and deep understanding of ASML's technology and the broader semiconductor industry. His leadership is expected to continue ASML's trajectory, leveraging his established knowledge base within the company.

President, Chief Executive Officer and Chair of the Board of Management

As Executive Vice President and CFO, Roger J. Dassen's role is critical to ASML's financial stewardship. His prior experience within the company suggests a deep familiarity with its financial operations and strategic objectives, positioning him to effectively manage the company's capital structure and financial performance.

Executive VP, CFO & Member of the Management Board

Frederic J. Schneider-Maunoury's position as Executive Vice President and COO underscores his responsibility for ASML's operational execution. His extensive experience in operational roles within the company indicates a strong command of the complex manufacturing and supply chain processes essential to ASML's global leadership.

Executive VP, COO & Member of the Management Board

Wayne R. Allan's appointment as Executive Vice President, Chief Strategic Sourcing & Procurement Officer in April 2023 highlights ASML's focus on optimizing its supply chain and procurement strategies. His role is crucial in managing the complex network of suppliers and ensuring the efficient acquisition of critical components, directly impacting ASML's production capacity and cost management.

Executive VP, Chief Strategic Sourcing & Procurement Officer and Member of Management Board

James Koonmen's role as Executive Vice President and Chief Customer Officer, a position he assumed in April 2024, emphasizes ASML's commitment to customer relationships and market responsiveness. His background in customer-facing leadership suggests a strategic focus on understanding and meeting the evolving needs of ASML's global clientele, a key factor in maintaining its market dominance.

Executive VP, Chief Customer Officer & Member of Management Board

Nils Andersen, as Chair of the Supervisory Board, brings a wealth of experience from leading major global corporations such as AkzoNobel and Maersk. His extensive executive background provides a strong foundation for overseeing ASML's strategic direction and governance, ensuring robust board-level oversight.

Chair of the Supervisory Board

Annet Aris contributes her expertise in strategy and digital transformation to ASML's Supervisory Board. Her background is valuable in guiding the company's long-term strategic planning and its adaptation to the rapidly evolving technological landscape.

Member of the Supervisory Board

Birgit Conix's financial and risk management expertise, honed during her tenure as CFO of Umicore, provides ASML's Supervisory Board with critical insights. Her contributions are essential for robust financial oversight and the effective management of the company's financial risks.

Mark Durcan's deep semiconductor industry expertise, gained as CTO of Micron Technology, is a significant asset to ASML's Supervisory Board. His technical insights are invaluable for guiding ASML's technology roadmap and strategic investments in a highly competitive and rapidly advancing sector.

Warren East, former CEO of Rolls-Royce, brings extensive industrial and leadership experience to ASML's Supervisory Board. His track record in managing complex global operations provides valuable perspective for ASML's strategic decision-making and operational oversight.

Robert S. M. L. van Leen's extensive financial background, including his roles as CFO at Fugro and AkzoNobel, provides ASML's Supervisory Board with deep financial acumen. His experience is crucial for overseeing financial reporting, internal controls, and capital management strategies.

Patricia L. M. M. R. van Eetvelt's legal and governance expertise is a key contribution to ASML's Supervisory Board. Her insights are vital for ensuring compliance, navigating regulatory landscapes, and upholding strong corporate governance practices.

W. A. Pelsma, appointed to the Supervisory Board in January 2025, brings specialized expertise in technology and innovation. This focus is critical for ASML, a company at the forefront of technological advancement in the semiconductor industry, ensuring the board remains informed on emerging trends and opportunities.

J. B. M. Streppel's tenure as CFO of Philips provides ASML's Supervisory Board with substantial financial expertise. His experience in a large, multinational technology company is highly relevant to ASML's global operations and financial strategy.

Lam Research is a global supplier of innovative wafer fabrication equipment and services to the semiconductor industry, specializing in deposition, etch, and clean processes essential for building smaller, higher-performing devices.

The company operates in one reportable business segment, aggregating its various operating segments due to shared customer base, economic characteristics, and nature of products and services.

KLA is a leading supplier of process control and yield management solutions for the semiconductor and related electronics industries, providing inspection, metrology, and data analytics products to help manufacturers achieve target yield.

Offers a comprehensive portfolio of inspection, metrology, and data analytics products for IC manufacturers.

Develops and sells advanced vacuum deposition and etching process tools for specialty semiconductor customers.

Provides equipment and services for the inspection and testing of PCBs and ICs.

Applied Materials provides equipment, services, and software to the semiconductor and related industries, enabling the manufacturing of a wide range of electronic devices.

Capital equipment used to fabricate semiconductor chips.

Services, upgrades, and spare parts to enhance system performance and productivity.

Equipment for manufacturing displays for mobile devices, TVs, and other electronics.

Cadence is a global market leader in computational software, accelerated hardware, and IP solutions that enable engineers to design and verify complex electronic systems and semiconductors.

Software, hardware, and services used to design and verify a wide variety of semiconductors.

Silicon subsystems, software, and services used in semiconductor design.

Software and services used to design and verify physical electronic systems.

Key facilities include the headquarters in Veldhoven, Netherlands (partly owned and partly leased, 240k sqm office, 61k sqm clean room), a manufacturing site in Berlin, Germany (mainly owned, 61k sqm), and facilities in the US including Wilton, Connecticut (56k sqm campus) and San Jose, California (20k sqm). Facilities in Asia include locations in Taiwan, South Korea, and China.

ASML's management team is a high-quality steward for a Mature Compounder, characterized by exceptional capital allocation discipline and robust board oversight. The team is effectively navigating a precarious transition period, balancing the cash generation of the installed base with the massive pre-investment required for the High-NA EUV ramp. While the current CEO's external track record is unproven in a public CEO capacity, his deep internal knowledge and the strength of the surrounding board and financial leadership provide confidence. The primary tension lies between the aggressive 'cannibal' buyback strategy and the negative incremental ROIC driven by the High-NA investment cycle, a necessary trade-off for long-term dominance that management is executing with financial prudence.

ASML identifies material physical risks (flooding, windstorms) and transition risks (reputational and financial impacts from climate policies and carbon taxation). Mitigation actions include incorporating extreme weather considerations into building design, implementing insurance, developing backup plans for business continuity, and establishing climate-related targets. The company also faces challenges keeping track of fast-changing legislation on chemicals such as PFAS and RoHS.

Total full-time employees: 43,129. Gender pay gap: 10.2% (average hourly pay gap). 100% of employees are paid an adequate wage. Average hourly pay level is determined by dividing annual remuneration by scheduled hours. Temporary employees under ESRS refer to payroll employees with finite duration contracts.

ASML focuses on safety at every stage of the product life cycle. The Global Product Safety and Regulatory organization coordinates the approach. ASML adheres to regulations including RoHS, REACH, Batteries Directive, K-REACH, and TSCA. The company manages dangerous goods and hazardous properties identification early in the design process. ASML conducts third-party due diligence and collaborates with suppliers to identify and mitigate potential environmental and human rights impacts.

ASML conducts a Saliency Assessment to identify potential negative impacts in the supply chain, identifying very high risks in mining/extraction (environmental impacts, land rights, forced labor) and medium to high risks in materials processing (forced labor, excessive working hours). In manufacturing, risks include occupational health and safety and forced labor in electronics. ASML has a grievance mechanism (Speak Up Service) available to employees and value chain workers. The company engages in community partnerships.

This narrative is built upon a decelerating revenue growth rate (2.6% YoY in FY2024 vs 30.2% in FY2023), compressed EUV system volumes, and a sharp normalization of high-margin China sales. While gross margins remain elite at 51.3%, the company is absorbing significant cash outflows for inventory builds and R&D ahead of the High-NA revenue ramp.

The P14 Innovation Dossier classifies CapEx as 'Capacity Expansion' to support the construction of factory and research facility expansions in Veldhoven and Berlin. Management states in the 20-F that these investments are to support growth through the decade, specifically targeting capacity for 90 EUV and 600 Deep UV tools annually.

The increase in PP&E is driven by the construction of new factories and research facilities. The P8 Annual Report confirms that the auditor did not identify asset impairment as a Critical Audit Matter. There are no disclosed recurring asset impairments.

The P14 Innovation Dossier details reinvestment into High-NA technology and capacity expansion. The P7 Transcripts confirm that High-NA systems are shipping and being installed, but revenue recognition is back-end loaded.

3.500% ASML Holding NV Fixed Rate Senior Notes due 2025

1.375% ASML Holding NV Fixed Rate Senior Notes due 2026

1.625% ASML Holding NV Fixed Rate Senior Notes due 2027

0.625% ASML Holding NV Fixed Rate Senior Notes due 2029

0.250% ASML Holding NV Fixed Rate Senior Notes due 2030

2.250% ASML Holding NV Fixed Rate Senior Notes due 2032

Berliner Glas (ASML Berlin GmbH) Mortgage Loan

P/FCF

EV/EBITDA

Extensive executive experience in global companies, including as Group CEO of AkzoNobel and Maersk.

Senior executive with experience in strategy and digital transformation.

Experience in finance and risk management.

Former CTO of Micron Technology, deep semiconductor industry expertise.

Former CEO of Rolls-Royce, extensive industrial and leadership experience.

Former CFO of Fugro and AkzoNobel, financial expertise.

Former CFO of Philips, financial expertise.

Board of Management members are required to hold shares with a value equal to 6x annual base salary for the CEO and 3x annual base salary for other members.

ASML is a global leader in the development, production, marketing, sales, upgrading, and servicing of advanced semiconductor equipment systems. The company's systems consist of lithography, metrology, and inspection systems, which together form a holistic lithography solution. ASML acts as a system architect and integrator, collaborating closely with customers, suppliers, and partners across its innovation ecosystem to innovate the most advanced lithography systems in the world. The company's purpose is to unlock the potential of people and society by pushing technology to new limits.

Held WACC (12.2%) and Terminal Growth Rate (2.5%) constant, and solved for the Year 5 operating margin required to justify the current enterprise value of $408.4B.

Balance Sheet - Supplemental

Balance Sheet

Cash Flow Statement - Supplemental

Cash Flow Statement

Income Statement - Supplemental

Income Statement

Ratios

Valuation

Historical Ratios & Multiples - ASML

The semiconductor industry is experiencing a bifurcated recovery. AI-driven demand for High-Bandwidth Memory (HBM) and advanced Logic is a powerful tailwind, while traditional end markets like mobile, PC, and automotive remain sluggish. ASML is outperforming the broader equipment sector in terms of capital efficiency, with a 68.7% ROIC compared to the peer median of 40.6%.

ASML is at a critical juncture as it transitions to High-NA technology while navigating the normalization of its China business. Recent stock volatility has brought the valuation back to fair value, making it a pivotal moment to assess the long-term compounding thesis.

Revenue recognition of the first five High-NA EUV systems (EXE:5000/5200). This will validate the economic viability of the next-generation platform and address market concerns regarding margin dilution.

Confirmation of 2026 growth targets during the 2025 Investor Day. This would resolve the 'cannot be confirmed' uncertainty that is currently weighing on the multiple.

Geopolitical export controls permanently impairing the China market. China has been a major source of high-margin DUV revenue, and further restrictions could lead to a structural downshift in growth.

High-NA EUV execution risk. If the technology does not provide the expected cost-per-wafer benefits, customers may delay adoption, leading to stranded capacity and margin compression.

Liquidation value analysis is not relevant for the company's archetype ('Mature_Compounder') and was not performed.

Cash & Equivalents

Accounts Receivable

Inventory

Tax Assets

Short-Term Inv.

Other Current Assets

Net PP&E

Intangibles

Long-Term Inv.

Other Non-Current

Deferred Revenue

Tax Liabilities

Other Current Liabilities

Non-Current Debt

Other Non-Current Liabilities

ASML upgraded to Outperform from Hold at KGI Securities

Document

EX-99.1

ASML PROVIDES UPDATED VIEW ON DEMAND OUTLOOK, CAPACITY PLANS AND BUSINESS MODEL AT INVESTOR DAY MEETING

ASML price target raised to $1,911 from $1,642 at Bernstein

ASML initiated with an Outperform at RBC Capital

Rothschild Redburn Upgrades ASML Inc. (ASML) to Buy

ASML price target raised to $1,140 from $1,105 at Wells Fargo

ASML price target raised to $1,150 from $965 at Susquehanna

ASML price target raised to $1,642 from $1,528 at Bernstein

ASML upgraded to Outperform from Market Perform at Bernstein

ASML price target raised to $935 from $743 at Bernstein

ASML maintains a 100% monopoly on the Extreme Ultraviolet (EUV) lithography technology essential for the global AI infrastructure build-out, yet the stock is currently caught in a transition-year digestion phase. The debate centers on whether the massive pre-investment for High-NA EUV systems will yield the guided 2025-2026 ramp or if geopolitical export restrictions and China revenue normalization (expected to drop to 20% of sales) will permanently impair the growth trajectory. At current levels, the stock is trading at fair value, offering no margin of safety for the execution risks inherent in the next-generation technology rollout.

Executive Summary

ASML is the sole enabler of the sub-2nm semiconductor roadmap, leveraging its 100% market share in EUV lithography to capture secular AI demand. While 2024 served as a transition year, the upcoming 2025 ramp is supported by a 43.3 billion Euro backlog and a disciplined capital allocation strategy that has reduced share count by 7.0% over the last five years.<ul><li>Driver: Monopoly-led transition to High-NA EUV technology for sub-2nm semiconductor nodes.</li><li>Catalyst: Revenue recognition of the first five High-NA systems and the 2025 revenue ramp to 30-35 billion Euro.</li><li>Protection: Fortress balance sheet with negative 8.05 billion USD in net debt and 115.2x interest coverage.</li></ul>Our variant perception is based on time arbitrage. The market is currently fixated on the short-term headwind of China revenue normalization and management's cautious 2026 commentary, which led to a 16.3% single-day sell-off in late 2024. However, our analysis of the widening moat trajectory suggests that ASML's 100% monopoly on High-NA EUV systems, which command prices of 370 million USD each, will sustain above-average returns on capital for significantly longer than the market's 3-5 year 'fade to average' assumption. The market is pricing in a permanent structural deterioration in margins to 28%, whereas the company's historical 32.5% average and 68.7% ROIC suggest significant long-term compounding power that remains underappreciated.This is a long-term, buy-and-hold investment predicated on the continued execution of a proven business model and the compounding of per-share intrinsic value through technological leadership and aggressive share repurchases.

Core Investment Rationale

ASML operates as a system architect and integrator, providing holistic lithography solutions that include lithography, metrology, and inspection systems. The company generates revenue primarily through Volume Purchase Agreements (VPAs) for high-value systems and a growing Installed Base Management portfolio. This service-oriented segment provides high-margin recurring revenue (2.1 billion Euro in Q2 2025) and improves the cost of ownership for customers. Strategy is centered on maintaining technology leadership, currently transitioning from Low-NA (0.33) to High-NA (0.55) EUV systems to enable the next decade of chip scaling.The core of ASML's moat is its Extreme Ultraviolet (EUV) lithography systems, specifically the TWINSCAN NXE and the next-generation EXE:5000/5200 High-NA platforms. These are supported by intangible assets developed over decades and protected by a robust patent portfolio. Physical assets include a massive 240,000 square meter headquarters and cleanroom facility in Veldhoven, Netherlands, and a specialized manufacturing site in Berlin. These facilities are currently undergoing a 2.0 billion Euro annual expansion program to support a capacity target of 90 EUV and 600 DUV tools annually.ASML holds a dominant 82.9% market share in the overall lithography equipment subsegment. While Nikon and Canon compete in the mature DUV and i-line segments, ASML maintains a 100% global monopoly in EUV lithography. The competitive axis is innovation rather than price, as evidenced by stable gross margins of 51.3% despite revenue volatility. Peers like Lam Research and KLA Corporation operate in adjacent process steps (etch, deposition, and inspection) but do not challenge ASML's core patterning dominance.ASML has a history of consistent execution, maintaining an average ROIC of 22% with low volatility. However, the current situation is defined by a deceleration from 30.2% revenue growth in 2023 to just 2.6% in 2024, which management has labeled a 'transition year.' This slowdown was driven by a 2.8 billion Euro decrease in Logic sales as foundries digested capacity. Crucially, the boardroom underwent a planned leadership transition in April 2024, with Christophe Fouquet succeeding Peter Wennink as CEO. This transition occurs amidst a challenging geopolitical environment where the Dutch and US governments have tightened export controls on DUV systems to China. This has forced a normalization of China revenue, which surged to nearly 50% of sales in 2024 due to backlog digestion, back toward a historical 20% level. Furthermore, the company is currently facing a class-action securities lawsuit filed in November 2024, alleging that management misled investors regarding the pace of market recovery and the impact of these export restrictions.

Business & Situation

<ul><li>Bull Case: ASML's 100% monopoly on EUV technology makes it the indispensable gatekeeper for the sub-2nm AI chip era. The 43.3 billion Euro backlog provides high visibility for the 2025 ramp, and the aggressive buyback program (20.2 billion USD deployed over 4.7 years) continues to drive EPS accretion.</li><li>Bear Case: Geopolitical export controls could permanently impair the China market, which has been a major growth driver. Additionally, the margin-dilutive effect of High-NA revenue recognition and the exponentially rising R&D costs (4.3 billion Euro in 2024) may prevent the company from reaching its 54-56% gross margin targets.</li></ul>The consensus view is that ASML is a high-quality monopoly currently facing a cyclical trough and geopolitical headwinds. Investors are cautious about the 2026 outlook after management explicitly stated that growth 'cannot be confirmed' due to tariff uncertainties. This has led to a 'show me' sentiment where the stock is range-bound until the 2025 revenue ramp is realized.The semiconductor industry is experiencing a bifurcated recovery. AI-driven demand for High-Bandwidth Memory (HBM) and advanced Logic is a powerful tailwind, while traditional end markets like mobile, PC, and automotive remain sluggish. ASML is outperforming the broader equipment sector in terms of capital efficiency, with a 68.7% ROIC compared to the peer median of 40.6%.Our differentiated view is that the market is overly focused on short-term headwinds while underappreciating the durability of the moat and long-term compounding power. While the capital cycle appears to be at a 'Peak' with surging CapEx (7.3% of revenue) outpacing revenue growth, ASML's switching costs are widening. Ripping out an ASML tool would halt a multi-billion dollar fab for months, and there are no alternative suppliers for EUV. This lock-in ensures that even if the cycle turns, ASML's pricing power and returns on capital will remain elite. The current valuation implies a permanent margin compression that ignores the high-margin potential of the Installed Base Management portfolio, which grew 15.6% in 2024.The debate will be settled by the successful commercialization of High-NA EUV. While the pre-investment phase has resulted in negative incremental ROIC (-152.4%), this is a necessary trade-off for long-term dominance. We believe the secular AI tailwind will eventually overwhelm cyclical and geopolitical concerns, but the current price reflects a fair valuation of these competing forces.Our analytical edge comes from a deeper appreciation of the company's intangible assets and switching costs. By analyzing the forensic-grade buyback program-which saw management repurchase shares at 19.0x EV/EBITDA in early 2025-we see a leadership team that is highly attuned to intrinsic value, even as they navigate public market volatility.

Core Thesis

CEO Christophe Fouquet is a 10-year ASML veteran with deep technical and geopolitical expertise. While he is unproven as a public CEO, having taken the role in April 2024, his internal provenance ensures continuity of the company's complex technology roadmap. He is supported by CFO Roger Dassen, who has been in place since 2020 and has overseen the company's fortress balance sheet and aggressive capital return strategy.Capital allocation is exceptional. Management has deployed 20.2 billion USD to buybacks over the last 4.7 years, reducing the share count by 7.0%. These repurchases have been executed with high discipline, often at valuation troughs (e.g., 99/100 timing score in Q1 2025). M&A has been minimal but highly effective, with a 218.2x effectiveness ratio.Management maintains a candid tone in transcripts, openly discussing the 'transition year' and the uncertainties regarding 2026. However, external analysis suggests a documented weakness in managing market expectations, which contributed to the sharp 2024 sell-off.<ul><li>Board Independence: 100% (9 of 9 directors)</li><li>Chairman/CEO Roles: Separate</li><li>Chairman Tenure: 5 Years (Nils Andersen)</li><li>Insider Ownership: 0.01% (Negligible)</li><li>Shareholder Rights: Declassified Board, 10% threshold for Special Meetings</li></ul>The stewardship verdict is strong, supported by a fully independent Supervisory Board with deep industry expertise, including the former CTO of Micron (Mark Durcan) and the former CEO of Rolls-Royce (Warren East). The Governance Outcome Tree is as follows: 1. Status Quo: The current leadership executes the High-NA ramp, leading to a re-rating as 2026 visibility improves. 2. Compromise: Geopolitical pressures force a more conservative growth target, but the buyback program provides a floor. 3. Reset: A failure of the High-NA technology or a total loss of the China market would necessitate a strategic review, though the fortress balance sheet mitigates disaster risk.

Leadership & Governance

The valuation floor is anchored to the Bear Case DCF value of 411.91 USD, which models a permanent erosion of the company's moat through the loss of the China market and a failure of High-NA to achieve guided margins.The base case assumes a 20.9% revenue rebound in 2025 as the High-NA ramp begins and AI-driven memory demand persists. Operating margins stabilize at 33.0% by Year 3 as production efficiencies are realized.The bull case models a faster-than-expected High-NA adoption and a resolution of trade tensions, leading to 25% growth and 35% operating margins. Blue-Sky Potential: 1642.34 USD.The bear case is defined by moat erosion and declining profitability. It assumes revenue growth stalls at 0-2% and margins compress to 25% due to permanent export restrictions and High-NA execution delays. The final Bear Case value is 411.91 USD.

Valuation Context

<ul><li>Revenue recognition of the first five High-NA EUV systems (EXE:5000/5200). This will validate the economic viability of the next-generation platform and address market concerns regarding margin dilution.</li><li>Confirmation of 2026 growth targets during the 2025 Investor Day. This would resolve the 'cannot be confirmed' uncertainty that is currently weighing on the multiple.</li></ul>ASML is at a critical juncture as it transitions to High-NA technology while navigating the normalization of its China business. Recent stock volatility has brought the valuation back to fair value, making it a pivotal moment to assess the long-term compounding thesis.

Catalyst Path & Context

<ul><li>Geopolitical export controls permanently impairing the China market. China has been a major source of high-margin DUV revenue, and further restrictions could lead to a structural downshift in growth. China revenue is expected to normalize from nearly 50% of sales in 2024 to 20% in 2025.</li><li>High-NA EUV execution risk. If the technology does not provide the expected cost-per-wafer benefits, customers may delay adoption, leading to stranded capacity and margin compression. Incremental ROIC is currently negative 152.4% due to heavy pre-investment.</li></ul>

Primary Risks

<ul><li>Entry Target: Calculated threshold price required to restore a 30% expected return based on internal valuation.</li><li>Stop Loss: The primary stop-loss is the materialization of a 'Thesis Killer' such as the loss of the EUV monopoly. A secondary disaster-check is set at the 3-year low to protect against structural de-rating.</li><li>Position Size: Base Conviction is Medium due to the 2026 guidance uncertainty and China headwinds. Sizing reflects a 'Starter' posture while awaiting a more attractive valuation-based entry point, consistent with the Mature Compounder archetype's focus on predictability.</li><li>Time Horizon: The Mature Compounder thesis mathematically requires time for the ROIC-WACC spread to generate value, particularly as the company absorbs the High-NA investment cycle.</li></ul><ul><li>Quarterly High-NA system bookings and revenue recognition</li><li>China revenue as a percentage of total sales</li><li>Gross margin trajectory in the second half of 2025</li></ul>A fundamental, permanent impairment of the moat, such as a competitor successfully developing a cost-effective alternative to EUV lithography (e.g., Nanoimprint Lithography) or a permanent loss of the sub-2nm roadmap leadership.

Actionable Parameters & Monitoring

ASML remains a generational compounding asset with an unassailable monopoly on the critical technology required for the AI era. However, the stock is currently fairly valued as it navigates a capital-intensive transition year and geopolitical friction. We recommend a 'Starter' position only, with a final valuation target of 1060.30 USD, and suggest waiting for a more attractive entry point at 815.62 USD to capture a sufficient margin of safety.

Final Conclusion

Monopoly-led transition to High-NA EUV technology for sub-2nm semiconductor nodes.

Driver

Revenue recognition of the first five High-NA systems and the 2025 revenue ramp to 30-35 billion Euro.

Catalyst

Fortress balance sheet with negative 8.05 billion USD in net debt and 115.2x interest coverage.

Protection

ASML's 100% monopoly on EUV technology makes it the indispensable gatekeeper for the sub-2nm AI chip era. The 43.3 billion Euro backlog provides high visibility for the 2025 ramp, and the aggressive buyback program (20.2 billion USD deployed over 4.7 years) continues to drive EPS accretion.

Bull Case

Geopolitical export controls could permanently impair the China market, which has been a major growth driver. Additionally, the margin-dilutive effect of High-NA revenue recognition and the exponentially rising R&D costs (4.3 billion Euro in 2024) may prevent the company from reaching its 54-56% gross margin targets.

Bear Case

ASML maintains a 100% monopoly on the Extreme Ultraviolet (EUV) lithography technology essential for the global AI infrastructure build-out, yet the stock is currently caught in a transition-year digestion phase. The debate centers on whether the massive pre-investment for High-NA EUV systems will yield the guided 2025-2026 ramp or if geopolitical export restrictions and China revenue normalization (expected to drop to 20% of sales) will permanently impair the growth trajectory. At current levels, the stock is trading at fair value, offering no margin of safety for the execution risks inherent in the next-generation technology rollout.

From cautious recovery to AI-driven growth acceleration

Method	Implied Value	Weight	Weighted Value
DCF	$1,125.13	59%	$661.58
Comps	$1,056.47	35%	$372.93
Historicals	$435.01	6%	$25.67
Total Weighted			$1,060.18

ASML

Company Overview

Price History