ASML Stock Prediction: Why I'm Betting Big on ASML Stock—And You Should Too

The AI revolution is changing everything, and the semiconductor industry is at the heart of it. One company that keeps popping up in my research is ASML. They’re not just another semiconductor stock—they own the market for extreme ultraviolet (EUV) lithography, the machines that make advanced AI chips possible.

After digging into their financials, industry position, valuation, and growth potential, I’ve decided to open a position. Sure, there are risks, but I think the upside far outweighs them. Here’s my take.

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Is ASML Stock a Good Buy?

ASML isn’t just another chip company—they dominate the space. They’re the only supplier of EUV lithography machines, the critical tech behind AI-driven processors. TSMC, Intel, and Samsung all rely on ASML to manufacture cutting-edge chips.

Their Q4 2024 numbers were solid: €7.1 billion in net bookings, well above expectations, and demand for AI-related chips is only growing. AI chips are projected to make up 40% of the $1 trillion semiconductor market by 2030. With ASML being the only game in town for the most advanced chip-making tools, I see this as a strong buy for the long term.

For those curious about other high-potential tech stocks, my recent analysis on CrowdStrike’s 2025 stock forecast might be useful.

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Is ASML Going to Rise?

I think so, and here’s why. The semiconductor sector is booming, and ASML sits at the center of it all. The company’s CEO, Christophe Fouquet, is pretty clear about where things are headed: AI and high-performance computing are driving chip demand through the roof.

Even in the face of some short-term concerns (we’ll get to those in a sec), ASML's position in the market makes it hard to bet against. Analysts seem to agree—their price targets range from $767 (low) to $1,100 (high), with an average of $937. At the current price of $736.99, that’s looking like a solid risk-reward setup.

If you’re looking for other stock predictions, my take on Skechers stock for 2025 might be worth checking out.

I also use TradingView to track technicals on ASML and other stocks before making a move.

What Is the Long-Term Outlook for ASML?

ASML has everything I look for in a long-term investment: a monopoly-like grip on critical technology, strong financials, and a rapidly growing market.

Their three-year revenue CAGR is 22.5%, and earnings per share (EPS) is growing at 11.8% annually. They generate billions in free cash flow and have an ROE of 33.2%, which is miles ahead of the semiconductor industry average (~10%).

That said, competition is creeping in. Companies like DeepSeek are working on cheaper AI chips, which could reduce demand for ASML’s high-end machines over time. I don’t see this happening overnight, but it’s something to watch.

I recently covered TSMC and why it's one of the best semiconductor stocks to own if you’re looking for another play in this sector.

Is ASML a Good Dividend Stock?

If you’re looking for income, ASML isn’t exactly a dividend powerhouse. Their dividend yield sits around 0.98%, which is better than nothing, but not the main reason I’m buying.

That said, they do pay dividends and raise them consistently. In 2024, they announced a €6.40 per share dividend, a 4.9% increase from the previous year. It’s nice to get paid while holding, but this is 100% a growth play for me.

For investors focused on steady dividend-paying stocks, EOG Resources might be a hidden gem in the energy sector.

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What Are the Risks?

Every investment has risks, and ASML is no exception. Here’s what I’m keeping an eye on:

• Geopolitical issues – The U.S. and EU are blocking ASML from selling its most advanced machines to China. This cuts off a major customer and could limit growth.
• Cheaper AI chips could shake things up – If companies like DeepSeek make AI chips without needing ASML’s top-tier tech, it could impact demand.
• Transparency concerns – ASML stopped reporting order bookings, which makes it harder to track future revenue. Not ideal.

None of these are deal-breakers for me, but they’re things I’ll be watching closely.

Should You Buy ASML Stock?

I can’t tell you what to do, but here’s what I’m doing: I’m buying ASML because I think the AI boom is just getting started, and ASML is at the center of it.

If you’re considering it, here’s what I’d watch:

• China trade restrictions – Any updates here could be a game-changer.
• AI industry trends – Will companies still need ASML’s EUV machines long term?
• Competition from Nikon/Canon – If they develop real alternatives, ASML’s moat could shrink.

For now, I love ASML’s dominance, and I’m betting on them staying ahead. I’m in.

For those new to stock analysis, I highly recommend checking out my guide on understanding the P/E ratio with real-world examples to make better investment decisions.

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