Elon Musk Calls This "The Greatest Company in Europe"

North America is home to many of the world's leading and most valuable companies, including SpaceX and Tesla, both run by Elon Musk. But there are also many solid businesses in Europe involved in tech that make compelling investments, helping U.S. investors diversify outside domestic markets.

There's one company in particular, however, that has gotten the attention of Musk, one which he believes is the best in Europe, and that's ASML Holding (NASDAQ: ASML). Here's a look at what makes that company so special, and whether it can be a great investment today.

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Chipmakers need and rely on ASML's machines

ASML plays an important role in the tech sector, as its photolithography machines etch patterns onto chips. It has a virtual monopoly on extreme ultraviolet machines used in the newest and most advanced chips. For Musk, these machines are vital to Terafab and to his vision of creating a massive chipmaking factory.

Its dominant position in tech has enabled ASML to become one of the most valuable companies outside of North America, with a market cap of around $730 billion. Last year, its sales totaled 33 billion euros, and its top line has grown by 54% over the past three years. It also generates healthy profit margins of around 30%.

Given its importance to Terafab and its fantastic results, it may not come as much of a surprise, then, that Musk boasted about the company. Recently, in a post on social media, he said, "ASML should be treasured and supported. It is arguably the greatest company in Europe."

ASML could make for an excellent long-term buy

This year, ASML shares have risen by 77%, and over five years, they're up 170%. The main downside for investors looking to buy today is that, given its rapid rise in value, the stock isn't cheap, trading at more than 60 times trailing earnings. However, with tech companies continuing to invest heavily in AI and the latest chips requiring ASML's machines, the company has considerable growth ahead. And as its top line grows, so too will its earnings, bringing down that multiple in the future.

Ultimately, ASML's wide moat and competitive advantage are what make this a strong stock to own for the long haul. The threat of competitors taking market share isn't high, and as long as tech companies continue to invest heavily in developing the latest chips, ASML's business will continue to thrive. Its terrific financials and strong business make it an intriguing investment option for buy-and-hold.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML and Tesla. The Motley Fool has a disclosure policy.