Should You Buy, Sell or Hold ASML Stock at a P/E of 36.67X?

ASML Holding ASML shares are trading at a P/E of 36.67X, much higher than the Zacks Computer and Technology Sector’s P/E of 24.22X. This premium valuation is justified by the Zacks Value Score of D.

ASML Forward 12-Month (P/E) Valuation Chart

This premium valuation of ASML was achieved due to the rise in its stock price. ASML stock has surged 89.3% in the past year, outperforming the Zacks Computer and Technology sector’s appreciation of 33.6%.

Despite this rise in the stock price, ASML has underperformed its peers, including KLA Corporation KLAC, Applied Materials AMAT and Lam Research LRCX. KLA Corporation, Applied Materials and Lam Research have returned 98.3%, 116.6% and 170.1%, respectively, in the past year.

One-Year Performance Chart

Given these dynamics, investors wonder if it’s the right time to buy, sell or hold ASML stock. Let’s delve deeper into the fundamentals of the company for clarity.

ASML's Gains From Double-Digit Growth in Systems Sales

ASML’s net systems sales increased 12.4% year over year in 2025. The growth was mainly driven by the expansion of the logic and memory semiconductor market that is the backbone of the AI data centers.

While logic contributed to 66% of the top line, memory contributed the remaining. ASML’s extreme ultraviolet (EUV) lithography technology contributed 48% to the top line, while deep ultraviolet (DUV) contributed 49%, and the remaining was covered by ASML’s metrology and inspection tools.

ASML’s DUV lithography technologies like Argon Fluoride Immersion, Argon Fluoride Dry, Krypton Fluoride and Mercury I-line contributed 42%, 2%, 4% and 1%, respectively, in 2025. Out of the total system sales, China contributed 33%, while South Korea, Taiwan, the United States, Japan and EMEA contributed 25%, 22%, 12%, 5% and 1%, respectively.

While DUV still contributed more than EUV in ASML’s 2025 top line, the EUV share has grown rapidly to contribute 48% of the 2025 top line, much higher than 38% contribution of ASML’s 2024 top line. As the industry moves from 4nm to 3nm to 2nm nodes, chip manufacturers would shift from multi-patterning DUV to single-exposure EUV.

The EUV technology is experiencing the highest traction among DRAM customers, followed by high bandwidth memory and DDR. Higher adoption of EUV technology will also push the installed base revenues up. The company also ended 2025 with a €38.8 billion backlog, providing strong visibility in the revenue pipeline.

ASML Dominates the EUV Landscape Unchallenged

Although ASML faces competitive pressure from players like Lam Research, Applied Materials and KLA Corporation in the broader wafer equipment manufacturing market, ASML holds a near-monopoly in EUV technology.

EUV is crucial for the world’s most advanced chips at 3nm and below; it benefits from extraordinary pricing power and strategic importance with major customers like TSMC, Samsung and Intel.

ASML’s venture into sub-2nm production with High Numerical Aperture (High-NA) EUV systems is the next technological leap for chipmakers. This technology will provide ASML with long-term potential as the industry moves toward denser and more efficient chips. ASML’s High-NA machines will be central to that shift.

The Zacks Consensus Estimate for ASML’s 2026 earnings is pegged at $33.8, indicating a year-over-year improvement of 21%. The consensus estimate has been revised upward in the past seven days.

Conclusion: Hold ASML Stock Now

ASML’s unmatched EUV leadership and AI-driven demand visibility make the stock worth retaining for the long term. However, its premium valuation can limit upside right now. ASML carries a Zacks Rank #3 (Hold) at present.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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