The MATCH Act Could Blow a Hole in ASML's Revenue. Here's What Investors Need to Know.

When it comes to the politics of producing the world's most advanced semiconductors, discussions related to national security are frequently at the forefront. Such is the case with the Multilateral Alignment of Technology Controls on Hardware (MATCH) Act, a bipartisan bill that seeks to impose stricter export controls on the equipment used to manufacture cutting-edge chips.

Such legislation would apply to the systems produced by leading chip equipment maker ASML (NASDAQ: ASML). However, before making a move on this semiconductor sector stock, investors should keep in mind the specifics of the legislation and how it might affect the company and its revenue.

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The MATCH Act and ASML

The MATCH Act focuses on Netherlands-based ASML precisely because it is the only company in the world capable of manufacturing the extreme ultraviolet lithography (EUV) equipment that TSMC, Intel, Samsung, and others use to make the world's most advanced chips.

Investors should remember that export controls on that tech are nothing new. The U.S. and Dutch governments already bar ASML from selling its most advanced EUV equipment to China, so that country's chipmakers will not be affected by the MATCH Act directly.

Instead, the critical part of the proposed MATCH Act is how it would impose tighter resale controls. As conditions stand now, companies in countries under sales restrictions (such as China) might buy this equipment from third-party countries. The MATCH Act would also prohibit equipment sales to such countries.

The problem may come from how China and its allies react to the MATCH Act and other restrictions. Such limitations give Chinese companies more incentive to either steal ASML's trade secrets or to independently develop their own EUV technology. If they are successful, that could leave ASML with a competitor that could eventually sap the company's growth.

Why ASML can still prosper

So far, though, no meaningful competition has yet appeared in the EUV lithography space, and even if it did, ASML will likely have its hands full just serving the companies that conduct business with the U.S. and its allies. Precedence Research estimates a compound annual growth rate for the AI chip industry of 28% through 2035. That will take what is expected to be a $122 billion industry in 2026 to a $1.1 trillion size by 2035, and the industry will certainly need more of ASML's equipment to get there. As of the end of 2025, its backlog stood at 38.8 billion euros ($45.7 billion).

Revenue grew by 16% in 2025 and by 11% year-over-year in the first quarter of 2026. Investors should remember that ASML's quarterly growth rates often fluctuate meaningfully because it sells massive, slow-to-produce systems to a relatively small number of customers. That also affected net income, which grew by only 3% annually in Q1, well below the 27% increase in 2025.

Overall, the company also forecasts revenue growth of 16% again for 2026. With that, the chip equipment maker just raised guidance for 2026 to between 36 billion euros and 40 billion euros.

Moreover, investors tend to forget that ASML also derives approximately 25% of its net revenues from the maintenance of these machines. Since that figure includes maintenance revenue, it has lined up enough business to manufacture machines well into 2027.

Both sales and maintenance revenue could further bolster ASML's stock price, which increased by around 130% over the last year. That increase has taken its price-to-earnings (P/E) ratio to 49. Admittedly, that valuation is high considering the five-year average earnings multiple of 40, but it also implies the specter of tighter export restrictions has not alarmed ASML's investors.

Moving forward with ASML

Ultimately, investors should not expect much of a drag on ASML stock even if the MATCH Act tightens export restrictions.

The bill brings fresh attention to a longstanding problem -- namely, how to keep the latest EUV technology out of the hands of Chinese companies. It is possible that the third-party restrictions it proposes could affect sales at the margins.

Nonetheless, even if such efforts succeed, ASML is likely to be kept operating at full capacity simply trying to meet the demand coming from chipmakers based in the U.S. and allied nations. Thus, the stock is likely to continue rising regardless of how the MATCH Act plays out.

Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML, Intel, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.