ASML Holding N.V. (NASDAQ:ASML) closed at $1,867.31 on October 2, up 3.25% on the day and 78.98% over twelve months.
ASML makes the machines that print circuits onto silicon. At the leading edge, it is the only company that makes them. A monopoly is easy to assert and hard to prove. Two figures do it.
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The Moat Is Visible in Two Numbers:
ASML earns 53.94% on equity while carrying debt-to-equity of 9.09%. Those two readings do not normally appear together. A high return on equity is usually manufactured with borrowing, because leverage shrinks the denominator. ASML has almost no borrowing, which means the return is coming from the business.
A company earning more than half its equity each year without debt is being paid as though it has no competition. In capital goods, it largely does not. The reason is accumulated difficulty rather than a patent. An extreme ultraviolet lithography machine takes years to build and depends on a supply chain ASML spent two decades assembling. A competitor cannot buy that.
Pricing power follows. Operating margin is 37.06% and net margin 30.11%, on machinery. Demand is widening the moat right now. Revenue grew 21.30% and earnings 27.40%, because the most advanced AI processors are made on the leading edge, and the leading edge runs on these machines.
Cash confirms it. Operating cash flow was $11.49 billion against net income of $10.64 billion, so the earnings are arriving in the bank.
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What a Monopoly Does Not Protect:
Two exposures remain, and neither is competitive. The first is who buys. A handful of chipmakers operate leading-edge fabs, and they buy in waves tied to construction decisions. One customer deferring a fab moves the order book immediately. ASML cannot diversify its way out of that. The whole point of the moat is that very few companies can use the product.
The second is politics. These machines are export-controlled, so which customers ASML may sell to is decided by governments. Then there is the price. ASML trades at 59.89 times trailing earnings and 26.78 times book value after rising 78.98% in a year.
Almost nobody is positioned against it. Short interest is 0.38% of the float, which is remarkably low for a stock at sixty times earnings and tells you the market disputes the valuation rather than the business.
ASML sits at one end of a supply chain billionaire investors have been buying across. Their ten semiconductor holdings are listed here.
The Valuation Case:
ASML closed at $1,867.31 on October 2 and is worth $666.49 billion. Sustainability is the strongest part of the case. The most advanced chips require these machines, and only one company sells them.
On price, the two multiples disagree sharply. The trailing figure is 59.89 times and the forward figure 28.90 times, and that collapse is the market pricing earnings to roughly double. Enterprise value of $660.08 billion sits below the $666.49 billion market value, because the cash exceeds the debt.
Enterprise value to EBITDA of 49.07 is the number that makes the case hardest to argue. A price like that needs years of compounding behind it, and we looked at 33 stocks that could double inside three years in this list.
Conclusion:
ASML’s moat is widening. A 53.94% return on equity achieved on 9.09% debt-to-equity is what a monopoly looks like in the accounts, and AI demand is pushing every leading-edge chip through its machines. However, 59.89 times trailing earnings leaves no room for a deferred fab. The customer list is short enough that one order matters, and governments decide who may buy the machines. The number to watch is the order backlog, because that is where a customer’s hesitation appears first.
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.
