What Makes ASML Holding N.V (ASML) an Investment Opportunity?

Baron Capital, an investment Management Company, released its first quarter 2026 investor letter for its “Baron Opportunity Fund”. A copy of the letter can be downloaded here. The Fund declined 8.88% (Institutional Shares) in the quarter, outperforming the Russell 3000 Growth Index’s (the Benchmark) -9.54% return, but trailing the S&P 500 Index, which dropped 4.33%. U.S. equity markets started the year positively, driven by investor enthusiasm for pro-growth policies like reshoring and AI. In February, sentiment shifted due to losses in software, business services, and info industries, driven by AI disruption fears. The sell-off intensified after the U.S. and Israel attacked Iran. Market trends showed rotation from the Magnificent Seven, software, and growth stocks into cyclical, defensive, and value segments. The Fund focuses on disruptive secular growth trends that generate profitable opportunities. The first quarter was challenging for the Fund with war, rising oil and inflation, AI fears, and sector rotations. In addition, please check the Fund’s top five holdings to know its best picks in 2026.

In its first-quarter 2026 investor letter, Baron Opportunity Fund highlighted stocks like ASML Holding N.V. (NASDAQ:ASML) as a newly added position. ASML Holding N.V. (NASDAQ:ASML) is a Dutch-based semiconductor company that provides lithography solutions. On May 18, 2026, ASML Holding N.V. (NASDAQ:ASML) stock closed at $1,472.39 per share. One-month return of ASML Holding N.V. (NASDAQ:ASML) was 0.92%, and its shares gained 96.64% over the past 52 weeks. ASML Holding N.V. (NASDAQ:ASML) has a market capitalization of $567.48 billion.

Baron Opportunity Fund stated the following regarding ASML Holding N.V. (NASDAQ:ASML) in its Q1 2026 investor letter:

“During the first quarter, we initiated a position in ASML Holding N.V. (NASDAQ:ASML), a Dutch semiconductor equipment company and the world’s sole provider of extreme ultraviolet lithography (EUV) systems — the indispensable technology required to manufacture the most advanced chips at the smallest geometries. Without ASML’s machines, chipmakers cannot achieve the transistor densities needed to power artificial intelligence accelerators, flagship smartphones, autonomous vehicles, and other high-performance computing applications. This is not a temporary competitive advantage — the extraordinary complexity of EUV lithography and its sprawling global supply chain make it virtually impossible for any competitor to replicate, and we expect ASML’s monopoly position to endure for the foreseeable future. As we noted earlier in this letter, we exited our position in Nova Ltd. and redeployed the proceeds into ASML, where we see a more compelling long-term opportunity across several dimensions. As leading chipmakers race to expand advanced manufacturing capacity to meet surging AI demand, we expect ASML to benefit from rising EUV layer counts across advanced logic and memory, as well as the eventual ramp of its next-generation High-NA EUV, which offers superior resolution and enables continued transistor scaling. We are also entering a period of significant memory capacity expansion, driven by insatiable demand for high-bandwidth memory (HBM) in AI applications, and ASML is more directly levered to this buildout than Nova. Finally, ASML’s pricing power and increasing scale support significant gross margin expansion and strong double digit earnings growth — and we believe it stands as one of the most competitively protected businesses in global technology.”

In another article, we covered ASML Holding N.V. (NASDAQ:ASML) and shared the list of top tech stocks in billionaire Ken Fisher’s portfolio. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.