The Hidden Champion of AI: Why ASML Share Could Deliver Long-Term Wealth

When investors think of artificial intelligence stocks, names like Nvidia and Alphabet immediately come to mind. Yet one of the most critical players in the entire AI ecosystem remains conspicuously absent from mainstream investment discussions. ASML, valued at over $500 billion, is the share to buy today for investors seeking genuine long-term exposure to the AI revolution—but not in the way most people think.

The reason is deceptively simple: without ASML, almost nothing in modern AI would be possible. The company manufactures lithography machines—specialized equipment that uses extreme ultraviolet light to etch circuit designs onto silicon wafers. This manufacturing process is foundational to semiconductor production, and ASML holds an virtually uncontested monopoly in this space. You cannot build the chips that power ChatGPT, Claude, or any major AI model without ASML’s technology.

The Invisible Infrastructure Behind Every AI Chip

To understand why ASML is so critical, consider the chain of value creation in AI. Nvidia designs the chips. Alphabet develops the software. But ASML manufactures the machines that make the chips possible in the first place. It’s the ultimate bottleneck—and that’s precisely what makes it such an attractive long-term investment opportunity.

The AI boom has translated directly into explosive revenue growth for ASML in recent years. While growth can fluctuate—each machine sells for hundreds of millions of dollars, meaning small swings in unit sales create outsized financial impact—the overall trajectory remains firmly upward. This revenue expansion reflects the insatiable demand for semiconductor production capacity driven by AI adoption globally.

Having such a dominant market position comes with substantial advantages. ASML operates at an operating margin of nearly 35%, demonstrating how lucrative the business truly is at scale. The company generates a return on equity of 53% and return on invested capital of 43%—metrics that place it in rarefied air among technology companies.

A Business Model Built for Long-Term Wealth Creation

Perhaps most impressive is ASML’s fortress balance sheet. As of the third quarter of fiscal 2025, the company (based in the Netherlands and reporting in euros) held 5.1 billion euros in cash and equivalents against only 2.7 billion euros in long-term debt. This financial strength isn’t accidental; management has deliberately built this cushion to fund growth while maintaining flexibility.

For investors seeking a high-quality, long-term holding, ASML ticks all the boxes. The company possesses a defensible competitive position in an expanding industry, has demonstrated strong profit growth, maintains impressive margins, and enjoys a clean balance sheet. Each of these characteristics matters, but together they paint a picture of a genuine wealth-creation machine.

Growth Runway Extends Well Beyond 2030

Management has articulated an ambitious agenda: nearly doubling revenue by 2030 while expanding gross margins from the current 52% to 60%. This isn’t pie-in-the-sky guidance. The company’s historical return on invested capital demonstrates that when management deploys capital, it generates real returns. Moreover, the structural demand drivers—the need for more semiconductor capacity to support AI infrastructure—provide confidence that these targets are achievable rather than aspirational.

If execution meets expectations, ASML’s profit growth will outpace revenue growth, translating into meaningful earnings expansion. Management also plans to return excess capital to shareholders through both stock buybacks and dividends, aligning incentives between the company and long-term equity holders.

Valuation: The Real Question for Share Buyers Today

The one legitimate concern holding back ASML share as a purchase today involves valuation. The stock trades at over 50 times earnings—a steep multiple unless the company can deliver substantial, sustained earnings growth over the coming years. This is the trade-off every potential buyer must consider.

However, ASML’s characteristics as a long-term compounder suggest that meaningful earnings expansion is not merely possible but probable. The company’s competitive moat, capital efficiency, and positioning at the center of the AI supply chain provide structural support for growth. Nothing is guaranteed in investing, but the probability distribution tilts favorably for patient shareholders.

A Long-Term Investor’s Perspective

History provides some perspective. When Motley Fool recommended Netflix in December 2004, a $1,000 investment would have grown to $450,525. When Nvidia entered their stock recommendation list in April 2005, the same $1,000 investment would have reached $1,133,107 today. These examples don’t predict ASML’s future, but they illustrate what long-term compounders can deliver when they execute flawlessly in high-growth markets.

ASML possesses the attributes of such a compounder: monopolistic market power, strong financial performance, proven management, and access to one of the most profound structural trends in modern markets. For investors with a five-year or longer time horizon, ASML share represents one of the most meaningful long-term wealth-building opportunities available in technology today. The elevated valuation is a real consideration, but it shouldn’t blind investors to the quality of the underlying business.