ASML Holding N.V. (ASML): A Bull Case Theory

We came across a bullish thesis on ASML Holding on FluentInQuality’s Substack. As of 14ᵗʰ July, ASML Holding’s share was trading at $806.73. ASML’s trailing and forward P/E were 31.15 and 30.21 respectively according to Yahoo Finance.

ASML is not a chipmaker; it builds the machines that make the most advanced chips possible, forming the invisible foundation of modern computing. It monopolizes extreme ultraviolet (EUV) lithography, the cutting-edge process essential for fabricating next-gen semiconductors. No company can match ASML’s precision, which operates at a nanoscopic scale using 13.5nm light, space-grade ZEISS mirrors, and billionth-of-a-meter alignment. With zero real competitors, ASML stands as a gatekeeper to the global chip supply chain, enabling products from NVIDIA, Apple, AMD, Intel, and TSMC. Without ASML, advanced chips—and by extension AI, data centers, and national defense infrastructure—cannot be built.

Its EUV tools sell for over $200 million each, but due to limited supply and overwhelming demand, ASML allocates rather than sells, maintaining a multi-year backlog. The firm’s moat is fortified by thousands of patents, irreplaceable suppliers, and two decades of lead time, making it effectively impossible to replicate even with unlimited capital. While capital intensive, ASML is extremely capital efficient, boasting near-50% gross margins, industry-leading returns, and consistent free cash flow that funds buybacks and dividends.

Each new lithography node increases ASPs and deepens customer lock-in. As chips become more complex, demand for ASML’s precision rises—cementing it as a growing bottleneck in an increasingly consolidated industry. Its next leap, High NA EUV, is already underway. As the only Western firm producing such advanced lithography, ASML is also a geopolitical asset—banned in China, protected by allies. It doesn’t chase trends like AI or edge computing; it enables them. ASML is a fortress built on physics.

Previously we covered a bullish thesis on ASML Holding N.V. by Monopolistic Investor in May 2025, which highlighted the company’s leadership in EUV lithography, disciplined pricing strategy, and strong government backing. The company’s stock price has appreciated approximately by 8.06% since our coverage. This is because the thesis played out. Monopolistic Investor shares an identical view but emphasizes ASML’s geopolitical and technological indispensability.

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