ASML Holding N.V. (NASDAQ:ASML) closed at $1657.44 on October 15. The stock has returned 17.48%% during the last 6 months, compared to a 15.4% return for the Insider Monkey Billionaire Index and 11.4% for the State Street SPDR S&P 500 ETF Trust.
ASML builds the machines that print the patterns on advanced computer chips. For the most advanced patterning step, it is the only supplier in the world, which makes it the narrowest point in the chip supply chain.
It reported third-quarter results on October 14 and said something alongside them that matters more than the quarter did. The company does not expect to be able to build enough machines to meet what customers want in 2027 or 2028.
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A Shortage the Company Admits To:
Third-quarter net sales reached 11.7 billion euros and net income 5.0 billion. Those are good numbers, and they are not the interesting part.
The company told investors that its planned supply for the next two years will not fully meet demand. It is looking at ways to lift capacity beyond the 30% increase it had already promised, and some customers are expressing interest in orders for 2029 and even 2030.
A company that cannot build enough is in a stronger position than one that can. ASML appears in our 10 Most Promising Technology Stocks to Buy Right Now, though it is not the name on that list with the most room left. To see which is, click HERE.
Why the Order Book Is No Longer Published:
ASML stopped reporting quarterly orders this year. The reasoning was that the figure jumps around too much to mean much over three months, which is true, and which also removes the number investors used to judge momentum with.
That matters because demand this far out is a statement of intent rather than a contract in the ordinary sense. A customer that delays a plant pushes out the machines that go inside it, and the effect reaches ASML with a long lag.
The customer list is extremely short, and export rules mean governments decide who ASML is allowed to sell to. Neither of those risks sits anywhere the company can reach.
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Paying for a Shortage:
The shares trade at 28.90 times what analysts expect next year, against 59.89 times the past year. That is a full price, and the monopoly is the usual justification offered for it.
The shortage is the better justification. What the price buys here is a company whose limit is its own factory rather than its customers’ willingness to buy. Whether that is worth paying for depends on how long the limit holds.
Conclusion:
Judging this company on a single quarter was always a poor idea, and ASML has now made that formal by withdrawing the quarterly order figure. What replaced it is a plainer statement, which is that demand runs ahead of what the company can build for the next two years. On that basis, the price is full rather than stretched, because what it asks a buyer to accept is not a forecast of demand but the durability of the bottleneck creating it. The thing to watch is therefore not the results but whether customers hold to the plans they are currently making for the end of the decade.
Market Sentiment:
ASML Holding N.V. was held by 140 hedge funds with a combined stake value of about $21.77 billion at the end of Q2 2026 in the Insider Monkey database. This is up from 133 hedge fund holders with a cumulative investment value of around $16.38 billion in the previous quarter.
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This article is originally published at Insider Monkey.
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