ASML: Is the Stock a Buy as Demand for EUV Lithography Machines Soars?

ASML reported Q2 revenue of €9.3 billion, surpassing guidance, and lifted its 2026 revenue outlook to €43-45 billion as demand for extreme ultraviolet lithography equipment accelerates. The Dutch chipmaker, which holds a monopoly on EUV technology critical for advanced semiconductor manufacturing, is riding the AI chip and memory boom.

The company plans to expand manufacturing capacity by 30% with potential for another 30% increase in 2028 to meet surging orders. ASML currently trades at 35.5x forward price-to-earnings, a premium valuation reflecting its irreplaceable position in the semiconductor supply chain.

The raised 2026 guidance signals management confidence in sustained orders from major foundries racing to expand AI and high-bandwidth memory production. EUV lithography is essential for producing cutting-edge chips below 7-nanometer nodes, giving ASML pricing power as customers have no alternative suppliers.