Prediction: This AI Growth Stock Will Become Europe's First $1 Trillion Company by 2035

Key Points

• ASML has what it takes to more than triple over the next decade.

• The technological powerhouse serves a critical role in the AI value chain.

• ASML is worthy of a foundational role in a diversified AI portfolio.

• 10 stocks we like better than ASML ›

On Sept. 15, Alphabet joined Nvidia, Microsoft, and Apple as the fourth U.S. company to surpass $3 trillion in market capitalization. But turn your attention across the pond, and there is not a single European company that is worth over $1 trillion, or even half that amount.

Here's why Dutch semiconductor equipment giant ASML Holding (NASDAQ: ASML) is the best-positioned company to surpass $1 trillion in market cap within the next decade.

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Why leading European companies are much smaller than top U.S. companies

The European stock market is highly fragmented. Instead of being viewed as European Union companies, Siemens is a German company, Novo Nordisk is a Danish company, and Shell is a British company. It would be like if U.S. investors viewed Oracle and Tesla as Texas companies versus Microsoft and Amazon as Washington companies.

There are also different regulations in Europe and more conservative pension and funding rules. Companies tend to be more specialized, although there are some conglomerates, like LVMH Moët Hennessy Louis Vuitton SE, that united French luxury brands in the 1980s.

Most importantly, European stock markets simply haven't benefited from technology as much as the U.S. Many of Europe's largest companies aren't tech enterprises. In contrast, the U.S. stock market is dominated by tech-focused companies like the "Ten Titans" that continue to make up a larger share of the S&P 500. The U.S. is the tech capital of the world, and the tech sector makes up around a third of the S&P 500 -- illustrating its importance in the U.S. market.

ASML is an anchor in the AI industry

ASML popped 6.5% on Monday after a sell-side analyst who had been neutral on the stock upgraded it to a buy. The move pushed ASML's market cap to $341 billion -- making it the most valuable European company, even ahead of LVMH. To reach $1 trillion in 10 years, ASML would need a compound annual growth rate of 11.4% -- which seems reasonable for a cutting-edge technology company that heavily benefits from artificial intelligence (AI).

There's no contest that ASML is my top AI stock to buy now and hold for the long term. Holding a stock for years or even decades takes a lot of conviction. For ASML, the essential ingredient in the investment thesis recipe is its monopoly over the most complex part of the semiconductor manufacturing process. ASML's deep ultraviolet (DUV) systems use lenses to print features on microchips.

There are plenty of companies that make DUV machines, including Nikon and Canon, which specialize in camera lenses. However, what sets ASML apart is its extreme ultraviolet (EUV) machines. These machines use mirrors to reflect light because EUV light has a wavelength of just 13.5 nanometers (almost X-ray range), which is too small to pass through glass. At a wavelength that small, a glass lens would absorb the light instead of bending/refracting it.

Achieving such a small wavelength unlocks untold efficiency improvements, allowing ASML's machines to pack more transitions per chip by printing more precise features (narrower lines, smaller spacing, etc.). It's an incredible engineering feat, and one that is driving advancements in AI.

EUV's smaller wavelength, fewer steps, and high efficiency make it a must-have for fabs like Taiwan Semiconductor Manufacturing, Samsung Electronics, and Intel to handle increasingly sophisticated designs from Nvidia, Broadcom, and Advanced Micro Devices.

Steady growth at a great value

Despite the long-term potential, ASML warned investors during its last quarterly earnings release that it may not grow in 2026 -- which sparked a steep sell-off in the stock. However, ASML reaffirmed its 2030 targets. The high end of its guidance range calls for doubling revenue relative to 2024 levels. Additionally, ASML expects its gross margin to expand to the high 50% range, likely because high-margin EUVs are expected to make up an increasingly larger percentage of its sales mix compared to DUVs.

Even after its run-up, ASML sports a reasonable 31 forward price-to-earnings ratio, which is far cheaper than many other fast-growing AI stocks, especially considering ASML's strong moat in EUV technology. What's more, the company has a strong dividend. Currently yielding 0.8%, the quarterly payout is a nice cherry on top for investors seeking to add some passive income to their long-term holdings.

Round out your AI portfolio with ASML

ASML isn't a high-flying AI stock that is heavily disrupting cloud computing or making next-generation chips. Nor is it a tech conglomerate like Microsoft and Alphabet, which have a lot of moving parts in addition to their AI focus. However, ASML is well positioned to grow earnings by double digits over the long term, in lockstep with fabs expanding their manufacturing capacity to meet AI demand.

The stock is an especially attractive buy for investors who have valuation concerns about the current market, especially leading S&P 500 tech stocks. However, it's important to understand that ASML's results can swing based on its order volumes from key customers, as well as geopolitical tensions and trade policy.

Although ASML is a Dutch company, it is heavily influenced by U.S. trade actions. So, ASML's growth could stall in the near term due to factors outside of its control. Therefore, it's best to approach the stock with a long-term mindset, especially as a balanced play bridging the gap between growth and value.

In sum, ASML will benefit from higher chip demand, especially from AI. The stock may be a perfect buy for investors with exposure to other aspects of the value chain, such as the chip designers, fabs, or cloud computing plays. Adding an equipment supplier like ASML, rather than doubling down on just one part of AI, is a great way for investors to build a diversified portfolio.

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Daniel Foelber has positions in ASML, LVMH Moët Hennessy-Louis Vuitton, and Nvidia and has the following options: short November 2025 $820 calls on ASML. The Motley Fool has positions in and recommends ASML, Advanced Micro Devices, Alphabet, Amazon, Apple, Intel, Microsoft, Nvidia, Oracle, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool recommends Broadcom and Novo Nordisk and recommends the following options: long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short November 2025 $21 puts on Intel. The Motley Fool has a disclosure policy.