ASML crushed earnings and is up big year to date, yet management signaled 2026 could be flat to slightly up versus 2025 while China demand declines. Given ASML’s monopoly-like position in EUV and High-NA, why is it underperforming high-beta AI names? Is this simply valuation and timing of backlog conversion, or is there a real risk to 2026–2027 growth? Or, something else altogether?
ASML is the backbone of the AI boom, so why is it lagging the hype?
byu/Johnny_Yukon ininvesting
Posted by Johnny_Yukon
11 Comments
It’s a manufacturing company and the PER reflects that
They were operating at capacity for years now.
Just because AI is popular now, doesn’t mean they can ramp more than they already were.
And the fabricators are long term investments, not flavor of the day stuff. Going from ordering the EUV system to producing custom AI chips is probably 5+ years. And that’s assuming it’s replacing fabricators in an existing manufacturing facility.
My guess is that ASML is a high-margin, low-volume products
The market doesn’t follow logical rules.
It’s priced to perfection.
AI is booming. TSM and NVDA are growing big. ASML might grow in 2026.
ASML is very cyclical so they often have 2-3 years of growth followed by a year of decline or stagnancy. So technically, a flat year isn’t bad considering usually it’d be a down year
I don’t think people really understand how forward looking things work. The question is not “is ASML important today?” but “if this becomes viable will ASML be necessary tomorrow?” and the answer to that might be no. In fact that’s the valuation; people are not betting on ASML’s continued dominance.
All the other mentioned effects but also that it’s in Europe doesn’t help
It’s lagging the hype but also consider that if/when there’s a bust, they won’t fall as far as the software stocks, because they’ll still be near output capacity.
They’re priced as a monopoly. But major competition is coming to try to eat into this monopoly. Its current value as a company could be halved potentially if it’s status as a monopoly is threatened