ASML Holding N.V. (ASML): A Bull Case Theory

Ricardo Pillai

Tue, May 13, 2025, 8:15 AM 3 min read

We came across a bullish thesis on ASML Holding N.V. (ASML) on Substack by FluentInQuality. In this article, we will summarize the bulls’ thesis on ASML. ASML Holding N.V. (ASML)'s share was trading at $750.20 as of May 12^th. ASML’s trailing and forward P/E were 30.14 and 27.93 respectively according to Yahoo Finance.

An aerial view of a modern fabrication center with equipment for producing semiconductor components.

ASML Holdings (ASML) presents one of the most asymmetric opportunities in today’s market, where investor sentiment has shifted toward greed, with the Fear & Greed Index reading 63. While conventional wisdom cautions against excessive optimism, the presence of structurally dominant companies like ASML justifies embracing this market mood selectively. ASML is the sole global provider of extreme ultraviolet (EUV) lithography machines—€200 million+ tools that enable the production of the world’s most advanced semiconductors used in AI, smartphones, defense, cloud computing, and autonomous vehicles. These machines are technological marvels—assembled from over 100,000 parts, shipped across the world in six Boeing 747s, and fully booked for years by clients like TSMC, Intel, and Samsung. This isn’t just a competitive edge; it’s an unbreachable fortress, backed by decades of R&D, irreplaceable supply chain relationships, and critical patents. No rival has come close to replicating EUV capability, cementing ASML’s role as the beating heart of global semiconductor advancement. With national governments like the U.S. and EU tightly regulating ASML exports due to its geopolitical importance, the company’s strategic value extends far beyond commercial boundaries. Financially, ASML operates at the highest tier: gross margins exceed 50%, return on invested capital tops 30%, and its €40+ billion order backlog underscores both demand visibility and pricing power. Despite operating in a capital-intensive industry, ASML runs a relatively asset-light model, maximizing returns while benefiting from long-term secular demand driven by AI, high-performance computing, automotive, and 5G. In a world increasingly defined by silicon dominance, ASML is not just a toolmaker—it’s the equivalent of the world’s only functioning oil rig in a data-driven economy. Its technology enables the most valuable resource of the digital age: cutting-edge semiconductors. Owning ASML is owning the bottleneck of progress, and in a market driven by structural trends, few assets offer this level of rarity, necessity, and irreplicability.