Semiconductors
Dutch semiconductor equipment manufacturer with a global monopoly on EUV lithography machines essential for advanced chip production.
View forensic reportASML is the sole manufacturer of EUV lithography machines. With 200 systems in the field, High-NA ramping, and AI driving secular demand, the installed base alone is worth more than the market appreciates.
China generates roughly a third of ASML's revenue. A new House bill wants to cut that off. The EUV monopoly is real, but the valuation assumes a growth path that requires the China relationship to survive.
The only supplier of irreplaceable chip-making equipment just got 14% cheaper. The business did not.
ASML holds a legal and technological monopoly on extreme ultraviolet lithography. The question is not whether the moat is real. It is whether the valuation is pricing in growth the backlog cannot support.
At 45x earnings with revenue growth slowing to 4.9%, ASML's monopoly premium demands a specific future, and the order book says it's coming.