ASML's Five-Year Outlook: AI-Driven Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 26 2026
0mins
Should l Buy ASML?
Source: Fool
- Surging Market Demand: ASML's lithography machine sales have increased by 100% over the past five years, and with new chip manufacturing facilities emerging globally, demand is expected to continue rising, solidifying its monopoly in the semiconductor industry.
- Capacity Enhancement through Innovation: ASML's recently announced new process is projected to increase chip production by 50% per hour by the end of the decade, significantly lowering production costs and enhancing the competitiveness of its equipment in the market.
- Doubling Revenue Expectations: ASML's revenue is anticipated to double from $37 billion over the last 12 months to $75 billion in the next five years, with a 35% operating margin leading to $26.25 billion in operating earnings, further strengthening its financial health.
- Valuation Risk Consideration: Despite ASML's optimistic market outlook, its current market cap of $580 billion reflects a valuation of 22 times the five-year forward earnings estimates, which may pose a risk of stock price adjustment after a decade of rapid growth.
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Analyst Views on ASML
Wall Street analysts forecast ASML stock price to rise
12 Analyst Rating
12 Buy
0 Hold
0 Sell
Strong Buy
Current: 1359.760
Low
1385
Averages
1583
High
1911
Current: 1359.760
Low
1385
Averages
1583
High
1911
About ASML
ASML Holding N.V. is a holding company based in the Netherlands. The Company operates through its subsidiaries in the Netherlands, the United States, Italy, France, Germany, the United Kingdom, Ireland, Belgium, South Korea, Taiwan, Singapore, China, Hong Kong, Japan, Malaysia and Israel. The Company operates through one business segment which is engage in development, production, marketing, sales, upgrading and servicing of advanced semiconductor equipment systems, consisting of lithography, metrology and inspection systems. The Company offers TWINSCAN systems, equipped with lithography system with a mercury lamp as light source (i-line), Krypton Fluoride (KrF) and Argon Fluoride (ArF) light sources for processing wafers for manufacturing environments for which imaging at a small resolution is required. TWINSCAN systems also include immersion lithography systems (TWINSCAN immersion systems).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Financial Performance: In 2025, ASML generated revenue of €33 billion (approximately $37 billion), a 16% year-over-year increase, with net income reaching €9.6 billion (around $11 billion), reflecting a 27% growth, showcasing the company's success in cost control.
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- Strong Financial Performance: In 2025, ASML generated revenue of €33 billion (approximately $37 billion), a 16% year-over-year increase, with net income reaching €9.6 billion (about $11 billion), reflecting its resilience and profitability amid economic fluctuations.
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Optimistic Outlook for AI Sector Stocks
- ASML's Market Position: ASML Holding's extreme ultraviolet (EUV) machines play a crucial role in semiconductor manufacturing, with the AI chip market expected to grow by 29% by 2030, driving demand for ASML despite a limited customer base, while maintenance revenue provides recession resistance.
- Financial Performance: In 2025, ASML generated revenue of €33 billion (approximately $37 billion), a 16% year-over-year increase, with net income reaching €9.6 billion (around $11 billion), reflecting a 27% growth, showcasing the company's success in cost control.
- Vertiv's Growth Potential: Vertiv focuses on data center infrastructure, achieving over $10 billion in net sales in 2025, a 28% increase, with forecasts for 2026 between $13.25 billion and $13.75 billion, highlighting its critical role in the data center market.
- Investment Appeal: Despite Vertiv's P/E ratio of 71, its forward P/E of 40 due to anticipated growth makes it an attractive investment, with a $2,420 investment buying around 10 shares amid the data center construction boom.
See More
ASML and Vertiv's Key Roles in AI and Data Centers
- ASML's Market Monopoly: ASML's extreme ultraviolet (EUV) machines are critical in semiconductor manufacturing, with the AI chip market expected to grow by 29% by 2030, further driving demand for ASML's equipment and solidifying its monopoly in high-tech markets.
- Strong Financial Performance: In 2025, ASML generated revenue of €33 billion (approximately $37 billion), a 16% year-over-year increase, with net income reaching €9.6 billion (about $11 billion), reflecting its resilience and profitability amid economic fluctuations.
- Vertiv's Growth Potential: Vertiv's position in the data center cooling equipment market benefits from a projected 32% compound annual growth rate in the liquid cooling industry, with net sales exceeding $10 billion in 2025, marking a 28% increase and highlighting its critical role in the rapidly expanding data center market.
- Investment Appeal: Despite ASML and Vertiv's P/E ratios of 46 and 71 respectively, investors are willing to pay a premium due to their core positions in AI and data centers, with significant growth anticipated in the coming years.
See More
Stock Markets Pressured by Soaring Oil Prices
- Oil Price Surge Pressures Markets: Stock indexes are under pressure as crude oil prices soar over 8% following President Trump's aggressive stance on Iran, leading to a 0.06% drop in the S&P 500, a 0.23% decline in the Dow, and a 0.20% fall in the Nasdaq 100, indicating heightened inflation concerns among investors.
- Unexpected Jobless Claims Drop: Despite market pressures, initial jobless claims fell by 9,000 to 202,000, indicating a stronger labor market than anticipated, which may provide some support for stocks and alleviate investor fears of an economic slowdown.
- Divergent Energy Sector Performance: Energy producers like Diamondback Energy rose over 2% due to soaring WTI prices, while airline stocks such as American Airlines and Carnival fell more than 4% as rising fuel costs cut into profits, highlighting a clear divergence across sectors.
- Tech Stocks Decline: Chipmakers and AI infrastructure stocks retreated, with ARM Holdings leading the Nasdaq 100 down over 5%, reflecting waning confidence in tech stocks and potentially impacting future investment decisions.
See More
US Stocks Plummet as Oil Prices Surge
- Oil Price Surge: Crude oil prices soared over 13% as President Trump took a tougher stance on Iran, reaching a 3.5-week high, which not only heightened inflation fears but also pushed bond yields higher, with the 10-year T-note yield rising by 2 basis points to 4.34%.
- Unemployment Claims Drop: Weekly initial unemployment claims unexpectedly fell by 9,000 to 202,000, indicating a stronger labor market than the anticipated increase to 212,000, which could provide support for the stock market amid rising inflation concerns.
- Global Market Decline: Overseas stock markets are lower, with the Euro Stoxx 50 down 2.25%, China's Shanghai Composite down 0.74%, and Japan's Nikkei 225 sharply falling 2.38% from a two-week high, reflecting global economic uncertainty and investor caution.
- Airline Stocks Plummet: Airline stocks are sharply lower as crude oil prices surged over 10%, raising fuel costs; United Airlines and American Airlines Group both fell more than 6%, highlighting the direct impact of rising oil prices on airline profitability.
See More
VXUS: A New Opportunity for Overseas Stock Investment
- Portfolio Diversification: VXUS, the world's largest international stock ETF with $636.7 billion in assets, offers instant exposure to 8,703 overseas companies, enabling investors to effectively diversify their portfolios and reduce reliance on the U.S. market.
- Significant Valuation Advantage: With a price-to-earnings ratio of just 18 times, VXUS presents a compelling investment opportunity compared to the historically high 28 times for the S&P 500, particularly amid increasing geopolitical tensions and macroeconomic challenges.
- Low Fee Structure: VXUS boasts a low expense ratio of 0.05%, significantly lower than the average 0.14% for actively managed equity ETFs, allowing investors to enjoy higher net returns over the long term and enhancing overall investment efficiency.
- Future Growth Potential: According to Vanguard's Capital Markets Model, overseas stocks are projected to outperform U.S. stocks by 2.2% annually from 2023 to 2033, providing a strong long-term growth outlook for VXUS, especially as U.S. market valuations remain elevated.
See More
American Investors Should Consider Overseas Stocks
- Portfolio Diversification: With U.S. stocks historically valued at 28 times earnings, investors face compression risks, making the Vanguard Total International Stock ETF (VXUS), with total assets of $636.7 billion, an ideal choice for increasing overseas stock exposure and diversifying portfolios effectively.
- Cost Efficiency: VXUS charges a low expense ratio of just 0.05%, significantly lower than the average 0.14% for actively managed ETFs, allowing investors to achieve market returns at a reduced cost, thereby enhancing investment efficiency while pursuing global diversification.
- Quality Asset Allocation: VXUS holds 8,703 stocks with a median market capitalization of $52 billion and an average earnings growth rate of 15.9%, showcasing strong growth potential, particularly with 26% and 37% allocations to emerging markets and Europe, respectively, effectively diversifying risks and capturing global growth opportunities.
- Future Performance Outlook: According to Vanguard's Capital Markets Model, overseas stocks are expected to outperform U.S. stocks by 2.2% annually from 2023 to 2033, providing a compelling rationale for investors to reassess their portfolios, especially against the backdrop of high valuations in the current U.S. market.
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