ASML Holding (ASML)
Tecnología / Equipos de semiconductores
The world's only manufacturer of extreme ultraviolet (EUV) lithography systems — the physical bottleneck of every advanced chip — with 2026 guidance raised twice to €43-45bn. At $1,743 (~51× net operating profit after tax) base-case 5-year value $1,731 (+1%/year): Preserves value — the best moat in the industry at a price that already pays for it in full.
- Price
- $1,742.58
- Intrinsic value (5y, base)
- $1,731
- Total annual return (5y)
- 0.6%
- Status (nominal)
- Preserves value
- Margin of safety
- No margin
The essentials
- A monopoly stated plainly in the company's own 20-F: ASML is today the world's only manufacturer of extreme ultraviolet (EUV) lithography systems. Without EUV lithography there is no advanced-node chip, and without ASML there is no EUV lithography — it is the physical bottleneck of the entire artificial intelligence industry.
- The company raised its 2026 guidance twice in five months: from €34-39bn in the February 20-F to €36-40bn in April and to €43-45bn on July 15, with gross margin guidance moving from 51-53% to 54-56%. It is already touching the floor of the revenue range it had projected for 2030 (€44-60bn), four years ahead of schedule.
- The price already discounts it: at ~51× net operating profit after tax against a 21× exit multiple — within the semiconductor equipment band and below what the position rule suggests — multiple compression eats up nearly all the earnings growth. The concrete risks: four customers account for 61.2% of sales and China for 29.1%, under export licenses.
Intrinsic value — two valuation methods
Total return at 5 years: -2.5%/year = -3.2% appreciation + 0.7% dividend. The target price ($1,483) is ex-dividend; the $54 in dividends collected over 5 years are added separately.
By both methods, the value today (DCF $1,220 · Multiples $1,237) is below the market price ($1,743).
Pillars of the analysis
The verdict — today vs 5 years
Today — expensive, no margin of safety: at $1,743 trades ~40.9% above its value discounted to today (~$1,237); the expected return does not even reach the risk-free rate (4.5%).
At 5 years — Sobrevalorado: the expected total return is negative — the price already discounts a demanding scenario that, if not met, results in a loss.
The bridge: the return at 5 years falls below the risk-free rate (4.5%) — which is why there is not even a discount to today's value. To require a 15% annual return, it would need to be bought at ~$772.
Thesis
The business
It is hard to find a cleaner moat anywhere in the public markets. ASML is the world's only manufacturer of EUV lithography systems — its own 20-F states so — and therefore the physical bottleneck of every advanced-node chip. Return on invested capital exceeds 57%, far above the 10% hurdle, and is underpinned by a trait rarely seen: customers finance production in advance, with contract liabilities of €18,900M. A quarter of revenue is already recurring — service and upgrades on the installed base — and remaining performance obligations total €46,500M.
The valuation
A semiconductor equipment manufacturer of this quality is valued on enterprise value over net operating profit after tax. The growth path starts at +39.6%, but that is not an extrapolation: the company raised its 2026 guidance twice to €43-45bn, and the base year still carries the weak second half of 2025 — it is a catch-up against guidance, not a sustainable rate, which is why the path falls to +13% already in the second year. The exit multiple is set at 21×, within the category band and below what the position rule suggests, so as not to stack peak growth on top of a peak multiple. That yields $1,483 per share at five years, against $1,743 today.
The margin of safety
No margin of safety: the price already discounts a demanding scenario. The problem is not the business but the price: at ~51× net operating profit after tax, multiple compression toward 21× eats up nearly all the earnings growth, and total return works out to -3% per year (-3% from price plus +1% from dividends). The verdict is Overvalued. The asymmetry does not help either: the bear case — a cycle digestion with falling revenue, which is how capital goods behave when the cycle turns — loses considerably more than the bull case gains. For today's price to yield 10% a year, one would have to believe revenue reaches more than €100bn by 2031, well above even the ceiling the company itself projected for 2030.
What to watch
The central disconfirming factor is the capital cycle: ASML's customers are expanding capacity simultaneously and at an unprecedented pace, and capital flowing to where returns are high tends to compress them. The signal to follow is not ASML's revenue — which arrives with a one-to-two-year lag — but chipmakers' capital spending plans and remaining performance obligations, which anticipate contracted revenue. Second, export controls on China (29.1% of sales). Third, whether the company actually fills the capacity it is adding: it announced +30% in low numerical aperture EUV and +30% in immersion for 2027, and is evaluating another +30% for 2028. The revision of long-term targets at the June 2027 investor day is the next event that could move the thesis.
Educational / informational. Does not constitute investment advice.