AI stocks have been on fire in 2025. After Oracle and other hyperscalers revealed record-breaking capital expenditures, most semiconductor names raced back toward all-time highs. Yet one company that sits at the very heart of chip production has been noticeably absent from the party, ASML.
Despite that enviable position, the stock hasn’t kept pace with the AI rally. Shares are up almost 20% year to date but remain well below last year’s highs. That gap has investors asking, is ASML being unfairly left behind, or are the concerns warranted?
Key Points
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ASML is the irreplaceable bottleneck in chipmaking, it’s the only company capable of producing EUV lithography machines.
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The Mistral AI investment is likely to be transformative, beyond a financial stake, it allows ASML to use AI to optimize its complex operations.
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AI-driven demand for advanced chips ensures ASML remains a long-term winner.
The Mistral AI Investment Is More Than Symbolic
Last week, ASML grabbed headlines with a €1.3 billion investment in Mistral AI, a European startup building open-source AI models. ASML signed a collaboration agreement to apply Mistral’s models across its product portfolio from optimizing chip-making processes to accelerating R&D for customers.
This move mirrors what Nvidia has been doing, seeding investments across the AI ecosystem to create strategic optionality.
Analysts at Arete quickly upgraded ASML to a buy, while Bank of America suggested the investment could help expand its valuation multiple. Investors seemed to agree: the stock popped on the news.
What’s not fully appreciated is how AI could change ASML’s own operations. With EUV machines consisting of over 100,000 parts sourced globally, optimizing supply chains with AI could save the company hundreds of millions of euros annually.
Growth Still Strong, but Expectations Tempered
ASML’s second-quarter results were healthy. The company booked €5.5 billion in new orders, flat, but stable given global uncertainty.
For the full year, management expects growth to slow to around 15%, with guidance for 2030, up from €28.3 billion in 2024.
Still, the near-term narrative is tricky. ASML doesn’t benefit directly from soaring GPU demand like Nvidia, nor does it enjoy wafer-volume leverage like TSMC.
Competitive Moat Remains Untouched
Despite the cyclicality, ASML’s moat is practically impenetrable. Building an EUV machine requires expertise across optics, physics, precision engineering, and supply chain coordination that no other company has replicated.
In fact, one EUV system contains a mirror from Zeiss so precise it would be off by less than a nanometer if it spanned the size of Germany.
That technological edge is why ASML controls 100% of the EUV market and faces no direct competition. As the AI revolution drives demand for smaller, more efficient chips, ASML’s tools remain indispensable.
Investor’s Dilemma
Today, ASML trades at roughly 30 times forward earnings. For a stock with muted near-term growth, that’s expensive. But the premium reflects the company’s irreplaceable role in chipmaking and its long runway tied to AI, cloud, and advanced computing.
The risk is timing. With customer spending uneven, investors may need patience before growth re-accelerates. The reward, however, is clear that if the AI build-out continues, every data center expansion eventually leads back to ASML’s machines.
A Stock to Accumulate on Weakness
The Mistral AI deal may prove to be a catalyst that re-energizes investor sentiment. It gives ASML a stake in AI beyond being a supplier and could improve its own operations in ways investors aren’t fully considering.
While near-term earnings may disappoint, expectations are low enough that ASML could surprise on the upside. For long-term investors, nibbling at today’s levels makes sense. If AI demand keeps compounding, ASML will inevitably be a major winner, even if it’s been slow out of the gate.