Prediction: This Artificial Intelligence (AI) Semiconductor Stock Will Join the $1 Trillion Club by 2028

There are currently 16 companies that have crossed the $1 trillion market cap plateau, with two more, Walmart and JPMorgan Chase, knocking on the door.

One of the next artificial intelligence (AI) stocks to reach $1 trillion in market cap should be the Dutch semiconductor company ASML (NASDAQ: ASML).

Currently, ASML is the world's 20th-largest company, with a market cap of about $693 billion. Based on its rapid growth rate over the past five years or so, it should reach $1 trillion sometime in 2028.

ASML, which makes the lithography equipment used to manufacture semiconductors and chips, has been growing rapidly during the artificial intelligence boom. While it's not a chip foundry like Taiwan Semiconductor, it has a competitive advantage similar to Taiwan Semiconductor.

Image source: Getty Images.

ASML is the dominant leader in its space, with a market share of roughly 90%. It is also agnostic in that its equipment is used by all the major chipmakers, including Taiwan Semiconductor, and it does not compete with any of them as a chipmaker itself.

Plus, its extreme ultraviolet (EUV) lithography machines are cutting-edge and sought after by the leading foundries and chipmakers, such as Samsung Electronics, Taiwan Semiconductor, Intel, Micron, and SK Hynix, among others. Some analysts suggest that its competitors would need 10 years and an investment of more than $100 billion to simply catch up to its technology advantages. That's a huge leg up on the competition.

The total addressable market for chips is expected to be more than $1 trillion in 2030, and the company anticipates revenue of between $50 billion and $68 billion by 2030 -- or 44 billion to 60 billion euros. But some analysts, like Bank of America, think revenue could reach $83 billion by 2030, or 73 billion euros.

Will it join the $1 trillion club by 2028?

At the end of fiscal 2025, ASML generated 32.7 billion euros in net sales, around $37 billion. That's a roughly 15% growth rate from $32 billion in 2024.

A 15% growth rate over the next five years would easily put ASML's net sales at about $75 billion by the end of 2030 -- more than double its current total. That's probably what BofA is thinking in its projections.

Given the explosion in AI and its huge competitive advantages, I do not see ASML's growth rate slowing down -- if anything, it may increase.

So, if you look at how the market cap has grown over the past five years during the initial AI boom, it is not out of the realm of possibility that ASML could hit $1 trillion in market cap in two years.

In July of 2021, ASML's market cap was $288 billion, so it has grown at a 19% annualized clip over the past five years. If it averages 19% growth over the next two years as of June 25, the market cap would be roughly $980 billion. So, by the end of calendar year 2028, it would likely surpass $1 trillion and be, perhaps, the 20th company to join the club.

Bank of America is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Dave Kovaleski has positions in Micron Technology. The Motley Fool has positions in and recommends ASML, Intel, JPMorgan Chase, Micron Technology, Taiwan Semiconductor Manufacturing, and Walmart. The Motley Fool has a disclosure policy.