$ASML: A monopoly that just confirmed its throne

There are companies that are good, companies that are great. And then there’s ASML — a company without which modern civilization literally cannot manufacture chips. No other company in the world can do what they do. And the results for 2025 only confirmed that.

What ASML actually does and why it matters

ASML builds lithography machines — enormous devices that use light to "draw" circuits onto silicon wafers from which chips are made. The more precise the machine, the more powerful and energy-efficient the chip.

The key technology is called EUV. One such machine costs over $200 million, weighs 180 tons and consists of more than 100,000 components. ASML is the only company in the world that can build it. TSMC, Samsung, Intel — all without exception have to buy from ASML if they want to produce the most advanced chips.

A monopoly built by decades of research that no one can replicate overnight.

Q1 2026 results confirm a strong start to the year

ASML has just released results for the first quarter of 2026. And they are exactly what you would expect from a monopoly.

Revenue reached €8.8 billion — at the upper end of its own guidance. Net income was €2.8 billion, with earnings per share of €7.15. That’s roughly €0.54 above analyst consensus. Gross margin 53%, again at the upper end of the outlook.

But the most important thing came in the form of an increased outlook. ASML raised its revenue outlook for full-year 2026 to €36–40 billion, from the previous €34–39 billion. And a key detail: this projection already includes potential impacts of export restrictions to China.

Demand exceeds supply

Customers in the memory segment report that capacity for 2026 is largely sold out and supply constraints are expected in the coming years. The main constraint is not demand. It’s ASML’s own production capacity.

The company plans to deliver at least 60 EUV systems in 2026, with potential to scale to 80 systems in 2027. Producing a single machine is so complex that capacity cannot be ramped up overnight. ASML therefore operates in a structural supply shortage, and that’s exactly the kind of situation a long-term investor wants to see.

$TSM is increasing its capital expenditures for 2026 by 33% and is directing 70–80% of its budget to advanced processes. $MU and $HY9H.F are on the same wavelength.

Share buybacks and dividend

In Q1 2026 ASML repurchased its own shares for €1.1 billion. The dividend for 2025 is €7.50 per share, an increase of 17% compared to the previous year.

A company that raises its dividend by 17% and aggressively buys back shares sends one clear signal. Management believes that structural demand for their machines is not going away.

My view

ASML is one of the few companies for which the word "monopoly" doesn't feel like an exaggeration. It’s a monopoly in the truest sense — technologically fortified, protected by decades of research, and practically impossible to replicate.

The Q1 2026 results brought no surprises in the sense of changing the story. On the contrary, they confirmed it. Revenues at the top end of guidance, earnings per share above expectations, an increased outlook for the full year. And what interested me most was that management explicitly said the outlook already accounts for export restrictions. Demand from the U.S., Europe and the rest of Asia is strong enough to make up for China.

The reason I’m interested in this company long-term is that every chip made today for AI infrastructure has passed through an ASML machine. Every data center, every server, every GPU. As long as the world wants more powerful chips, ASML will have work.