1 Prediction for ASML Stock in 2026

Key Points
ASML is the only company that does what it does.
This means it can charge a lot for its machines -- and its backlog of orders is huge.
The stock's valuation isn't cheap, but it may still be reasonable for risk-tolerant long-term investors.
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It can be fun, and occasionally instructive, to see what some people predict for various stocks. So permit me to make a prediction: In 2026, ASML (NASDAQ: ASML) will thrive.
The company specializes in making the lithography equipment required for semiconductor manufacturing, and it's the only provider of advanced extreme ultraviolet systems (EUVs) -- which my colleague James Hires has called "the most important machine in tech."
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ASML's equipment etches intricate circuitry onto tiny silicon wafers. Such equipment is very pricey, with its EUV machines costing around $400 million apiece. Better still, ASML's machines tend to last for decades, and throughout that period, they require servicing and occasional parts replacement -- from ASML.
It's no wonder, then, that the company has been thriving, posting average annual gains of 30% over the past decade (as of March 23). Over the past year, its stock has surged nearly 80%.
I'm predicting that ASML will keep thriving because semiconductor companies will keep thriving, as they're vital for artificial intelligence (AI). A select group of huge tech companies is investing heavily in AI -- to the tune of nearly $700 billion in 2026 alone.
That's reflected to some degree in ASML's fourth-quarter earnings report, which featured a backlog of orders totaling 38.8 billion euros (nearly $45 billion at recent conversion rates). Its CEO has noted that "...we expect 2026 to be another growth year for ASML's business, largely driven by a significant increase in EUV sales..."
Of course, there are some risks, including geopolitical ones. If it's less able to do business with China, for example, that will hurt. And regardless of that, ASML will need to keep innovating and improving its offerings in order to receive more orders.
Still, the stock seems a compelling proposition to me, though its price isn't exactly cheap. Its recent forward-looking price-to-earnings (P/E) ratio of 40 is well above the five-year average of 33, for example.
ASML may be a rare monopoly play, but know that there are other intriguing microchip stocks out there, too.
Should you buy stock in ASML right now?
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Selena Maranjian has positions in ASML. The Motley Fool has positions in and recommends ASML. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.