AI Can't Thrive Without This Stock. Hint: It's Not Nvidia.
Key Points
The world’s top foundries can’t produce the latest AI chips without ASML’s machines.
ASML has plenty of room to grow, and its stock still looks reasonably valued.
- These 10 stocks could mint the next wave of millionaires ›
Nvidia (NASDAQ: NVDA) is often considered the linchpin of the AI market. It's the world's largest producer of high-end data center GPUs used to train AI algorithms. Most of the top cloud and AI companies rely on Nvidia's GPUs to power their newest AI applications, and Nvidia locks in those customers with its proprietary software and services.
However, there's one company that matters even more than Nvidia. Without this company, Nvidia's GPUs -- as well as other advanced AI chips -- wouldn't even exist. That company is ASML (NASDAQ: ASML), the world's largest producer of lithography systems.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Image source: Getty Images.
Why does ASML matter more to the AI market than Nvidia?
Lithography systems are massive machines that optically etch circuit patterns onto silicon wafers. ASML, which is based in the Netherlands, is the only producer of extreme ultraviolet (EUV) lithography systems for manufacturing the world's smallest and densest chips.
All of the world's leading foundries -- including TSMC, Samsung, and Intel -- use ASML's EUV systems to produce their most advanced chips. Those chips include the latest AI chips from Nvidia, AMD, and Broadcom, as well as the latest mobile, PC, and server chips. These systems cost $200 million to $400 million and are shipped in pieces with multiple planes.
ASML is also the leading producer of deep ultraviolet (DUV) systems, which are used to produce older and larger chips. Those chips don't attract as much attention as Nvidia's latest GPUs, but many of them serve essential roles in data centers. DUV systems cost between $10 million and $90 million, and they're roughly the size of a small van.
Without ASML's machines, the world's top foundries would grind to a halt. That's why I believe ASML matters more to the expansion of the AI market than individual chipmakers like Nvidia.
How much bigger could ASML grow?
ASML's monopolistic position in the EUV market grants it significant pricing power and room to grow as the semiconductor market expands. It's barred from selling its EUV systems and higher-end DUV systems in China, but its growth in other markets is easily filling that void.
From 2025 to 2028, analysts expect ASML's revenue and EPS to grow at CAGRs of 26% and 39%, respectively. Its stock has already rallied nearly 130% over the past 12 months, but it still looks reasonably valued at 29 times next year's earnings. If you're looking for a reliable, high-growth AI stock with a wide moat, ASML checks all the right boxes.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
- Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $553,267!*
- Apple: if you invested $1,000 when we doubled down in 2008, you’d have $59,116!*
- Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $443,461!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.
See the 3 stocks »
*Stock Advisor returns as of August 26, 2026.
Leo Sun has positions in ASML. The Motley Fool has positions in and recommends ASML, Advanced Micro Devices, Broadcom, Intel, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
Recommended Articles
