Should You Invest in ASML Holding NV (ASML)?

Parnassus Investments, an investment management company, released the “Parnassus Growth Equity Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the Fund (Investor Shares) returned -8.59% (net of fees), outperforming the Russell 1000 Growth Index’s -9.97% decline. In the first quarter, post-election optimism, driven by reduced regulation and a business-friendly environment, drifted away to concerns over fiscal and tariff uncertainties, which increased volatility and raised fears of a recession. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Parnassus Growth Equity Fund highlighted stocks such as ASML Holding N.V. (NASDAQ:ASML). Headquartered in Veldhoven, the Netherlands, ASML Holding N.V. (NASDAQ:ASML) offers lithography solutions for the development and production of advanced semiconductor equipment systems. The one-month return of ASML Holding N.V. (NASDAQ:ASML) was 6.62%, and its shares lost 22.98% of their value over the last 52 weeks. On June 27, 2025, ASML Holding N.V. (NASDAQ:ASML) stock closed at $795.95 per share, with a market capitalization of $312.968 billion.

Parnassus Growth Equity Fund stated the following regarding ASML Holding N.V. (NASDAQ:ASML) in its Q1 2025 investor letter:

"In Information Technology, we moved from an underweight to an overweight as we added new positions in Synopsys, ASML Holding N.V. (NASDAQ:ASML) and AppFolio while selling Adobe and Procore Technologies. ASML is a leading supplier of photolithography systems, equipment crucial for producing advanced microchips. It has a wide moat built on technology innovation, high market share and strong customer and supplier relationships."

ASML Holding N.V. (NASDAQ:ASML) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 80 hedge fund portfolios held ASML Holding N.V. (NASDAQ:ASML) at the end of the first quarter, which was 86 in the previous quarter. While we acknowledge the potential of ASML Holding N.V. (NASDAQ:ASML) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered ASML Holding N.V. (NASDAQ:ASML) and shared the list of top AI and technology stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of ASML as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.