To The Moon

Why I doubled down on ASML in July’s crash... and see more upside ahead. $ASML Holding NV(ASML)$ 

In mid-July, ASML shares were hit hard after management warned that 2026 growth could slow due to export controls and delayed capex from customers. The stock dropped sharply, and sentiment soured overnight.

While many took profits or sat out, I saw an opportunity. I bought the dip, and here’s why I’m still holding with conviction today.

1. The drop was fear, not fundamentals

ASML’s Q2 numbers were actually solid.

Net sales came in at €7.7 billion, gross margin at ~53.7 %, and net bookings reached €5.5 billion, including fresh EUV orders.

The sell-off wasn’t about operational weakness, but investor nerves over trade policy. To me, that made the move emotional, not structural. When a world-leading company corrects on noise, not execution, that’s when I buy.

2. The order book speaks louder than headlines

ASML’s backlog remains one of the most enviable in the semiconductor world. Its EUV and DUV systems are mission-critical for every major foundry transition ahead.

Even if growth in 2026 slows, the demand pipeline remains anchored in AI, advanced logic, and memory recovery. That backlog provides visibility and cushions near-term volatility.

3. The moat is still deep

ASML’s technological edge in EUV and High-NA lithography is unmatched. No competitor currently offers a viable substitute.

The ecosystem lock-in around EUV tools, software integration, and installed-base services makes ASML not just a supplier, but a gatekeeper of next-gen semiconductor scaling. That kind of monopoly power doesn’t fade overnight.

4. Cash flow, services, and software keep margins strong

Even during industry pauses, ASML’s recurring income from installed-base management, upgrades, and software licensing helps sustain margins. The company is evolving beyond hardware into ecosystem control — a transition few equipment makers pull off successfully.

5. Optionality in AI and Europe’s strategic positioning

ASML recently became a lead investor in Mistral AI, marking a quiet but important step into the European AI infrastructure ecosystem. It’s a signal that ASML understands the software-hardware convergence and wants to stay close to the value creation side of AI.

With the EU doubling down on sovereignty in semiconductors and AI, ASML sits at the heart of that policy tailwind.

6. Why I’m still bullish

The July correction reset expectations. At these levels, ASML trades at a fairer valuation relative to its long-term earnings power. I expect continued tailwinds from:

- AI-driven data-center capex

- High-NA EUV ramping in 2025–2026

- Ongoing recovery in logic and memory

- Installed-base service growth

My view: short-term volatility is just noise in a multi-year compounding story.

7. What could go wrong

I’m watching three risks closely:

I) Export control tightening — especially to China, which could trim shipments.

II) Capex pauses by major foundries.

III) Supply bottlenecks in advanced packaging and HBM memory that might delay tool installations.

None of these change ASML’s long-term dominance, but they can move quarterly sentiment sharply.

Closing thought

I doubled down in July because conviction matters most when the crowd loses it. ASML remains the single most critical enabler of the global AI and chip race, and I believe that story is far from over.

So... Would you treat ASML as a core holding for the next decade, or is this as good as it gets?