My Top AI Growth Stock to Buy Now and Hold Through at Least 2030

Key Points

• ASML is powering important advancements in artificial intelligence.

• Its results can fluctuate based on order volumes and the economy.

• However, ASML shares sport a relatively inexpensive valuation.

• 10 stocks we like better than ASML ›

There are numerous ways to invest in artificial intelligence (AI), ranging from companies building and training AI models to organizations deploying AI to enhance existing processes. You can invest in companies that develop digital AI tools or bet on physical AI through robotics and self-driving cars.

Alternatively, you can invest in a company like ASML Holding (NASDAQ: ASML), which benefits from the growth of AI, regardless of its application or end use case. Here's why ASML has the makings of a foundational growth stock for long-term investors to buy and hold for years to come.

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A monopoly on semiconductor manufacturing

The semiconductor manufacturing process consists of cleaning chips, depositing materials onto those chips, coating the wafers with positive and negative photoresist, lithography, etching away unwanted materials, implanting positive and negative ions, and packaging.

ASML -- which originally stood for Advanced Semiconductor Materials Lithography -- sells systems that essentially print circuit designs layer by layer onto silicon wafers until the 3D structure of the microchip is complete. Lithography is arguably the most complex and important step in manufacturing semiconductors.

Suppliers like Applied Materials and Lam Research make equipment that is used in other steps. But no company in the world holds a candle to ASML when it comes to making extremely advanced systems for manufacturing chips for AI applications. ASML's latest models, called extreme ultraviolet (EUV) lithography machines, are essential for fulfilling AI order volumes.

The company is seeing a shift in its product mix from memory applications to logic, with 84% of net system bookings in the latest quarter used for logic end-use cases compared to 16% for memory. ASML's EUV machines are really good at making chips for logic, such as graphics processing units (GPUs) and central processing units (CPUs) used to handle complex AI workflows.

However, EUV machines are also used for memory chips, such as dynamic random access memory (DRAM). AI models depend on the working memory capacity of DRAM to store data for quick access. ASML sees demand for these EUV machines growing over time to fulfill AI needs. But it won't happen overnight.

ASML is forecasting steady growth through 2030 -- including revenue doubling from 2024 levels based on the high end of estimates. For 2025, ASML projects 15% revenue growth and 52% gross margin. But in its second-quarter earnings materials, ASML said that it can't confirm growth in 2026 due to macroeconomic uncertainties and trade tensions. The forecast spooked investors -- causing the stock to fall 10.8% in three days.

ASML is built for long-term investors

ASML's business model is unlike any other company's in the semiconductor space. Its machines fetch high margins due to their sophistication and use for the most advanced semiconductor applications. But ASML has a different sales cycle than other tech companies.

ASML sells its lithography machines to fabrication companies like Taiwan Semiconductor Manufacturing (NYSE: TSM), which produces GPUs for designers like Nvidia (NASDAQ: NVDA), which sells its GPUs to hyperscalers like Microsoft (NASDAQ: MSFT), which uses GPUs in its data centers to service its cloud customers, which are building AI tools and software. It's essential to recognize that ASML's sales are directly influenced by fabs needing to manufacture higher volumes and more complex chips.

The timing of when a key ASML customer orders a few machines can alter its results by quite a bit. In ASML's most recent quarter, the company sold 76 new units for 5.596 billion euros in revenue ($6.5 billion) or an average price of $85.5 million per unit. If trade tensions heat up and even one key ASML customer pauses orders, like Taiwan Semi, Samsung Electronics, or Intel, it could throw a wrench in the company's results and derail its short-term growth.

That risk is what ASML management called out on its earnings call. Management is being cautious and reminding investors of an inherent characteristic of its business. It is, by no means, a red flag that demand is slowing down.

ASML's latest EUV machines are about the size of a double-decker bus and weigh hundreds of thousands of pounds. They take months to ship and install at fab sites, often requiring hundreds of engineers. The complexity and processing of orders make ASML's sales vulnerable to economic cycles and changes in trade policies. ASML has to procure parts from around the world to build these machines in the first place, which would be more expensive if tariffs were to become widespread.

In sum, ASML plays an essential role in chip production. But due to the nature of its business model, its results can ebb and flow for factors that have nothing to do with the underlying investment thesis.

ASML is a compelling value

ASML is telling investors that its results over the next year and half could vary based on tariff policy and the timing of customer spending, but that the long-term future is brighter due to AI's appetite for computing power. So it's best to focus on where the company will be several years from now rather than the coming quarters.

Let's assume that ASML achieves its 2025 goal of growing revenue by 15% to 32.55 billion euros ($37.85 billion) and then doesn't grow in 2026 because tariffs lead customers to delay some orders.

In that case, ASML would need to increase revenue at a compound annual growth rate (CAGR) of 7.8% over the next four years to reach the low end of its 2030 revenue goal of 44 billion euros ($51.16 billion) and a 16.5% CAGR to reach the high end of its 2030 revenue goal of 60 billion euros ($69.77 billion). It's not a breakneck growth rate, but the ultra-high gross margin allows ASML to convert a substantial amount of revenue into profit, making the stock a great value in terms of earnings per share.

In ASML's latest quarter, it earned 7.7 billion euros ($8.92 billion) in sales and 2.3 billion euros ($2.66 billion) in net income for a profit margin of 29.8% and 5.90 euros in earnings per share ($6.85). The conversion from sales to earnings was roughly the same in its first quarter and in 2024 as well. So if we pencil in about 30% profit margin for ASML in 2030, it would generate 13.2 to 20 billion euros ($15.3 to $23.2 billion) in net income -- although the profit margin could be even higher given ASML expects gross margin expansion.

Based on ASML's market capitalization of about $289 billion at the time of this writing, the stock is trading for somewhere in the ballpark of 12.4 to 18.9 times 2030 earnings estimates. Its price-to-earnings ratio based on its trailing-12-month earnings is just 26.3. By its current earnings and management's projections through 2030, ASML has become too cheap to ignore.

Time to double up on ASML stock

ASML checks all the boxes for a stock to own over the long term. It makes high-margin, industry-leading products that address rapidly growing end markets. The company has set clear expectations for 2030 and outlined the technology and end markets that will drive the projected growth. But it also acknowledges that the quarter-to-quarter path to unlock that growth may be choppy.

ASML isn't the kind of stock that warrants jumping in and out of, or reading too much into, the day-to-day price action. Rather, it's a company worth owning over the long term if you want exposure to the growth of AI and technological advancement across industries.

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Daniel Foelber has positions in ASML and Nvidia. The Motley Fool has positions in and recommends ASML, Applied Materials, Intel, Lam Research, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft, short August 2025 $24 calls on Intel, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.