Should You Consider Purchasing, Selling, or Retaining ASML Shares with a Price-to-Earnings Ratio of 36.67?

ASML Holding: Valuation and Market Performance Overview

ASML Holding currently trades at a price-to-earnings (P/E) ratio of 36.67, which is significantly above the Computer and Technology sector average of 24.22. This elevated valuation is reflected in its Zacks Value Score of D.

ASML's Forward 12-Month P/E Ratio

Source: Zacks Investment Research

The premium on ASML’s shares is largely a result of its impressive stock price growth. Over the past year, ASML’s stock has climbed by 89.3%, outpacing the broader Computer and Technology sector, which saw a 33.6% increase during the same period.

However, when compared to other leading companies in the industry, such as KLA Corporation, Applied Materials, and Lam Research, ASML’s performance has lagged. In the last year, KLA Corporation returned 98.3%, Applied Materials surged 116.6%, and Lam Research soared by 170.1%.

One-Year Comparative Performance

Source: Zacks Investment Research

Given these trends, many investors are questioning whether now is the right time to buy, sell, or hold ASML shares. To answer this, let’s take a closer look at the company’s core business fundamentals.

Strong Growth Driven by System Sales

In 2025, ASML reported a 12.4% year-over-year increase in net system sales, fueled by the expanding logic and memory semiconductor markets that support AI data centers.

• Logic products accounted for 66% of total revenue, with memory making up the remainder.
• Extreme ultraviolet (EUV) lithography contributed 48% to revenue, while deep ultraviolet (DUV) systems made up 49%. The rest came from metrology and inspection tools.

Breaking down DUV sales in 2025: Argon Fluoride Immersion systems contributed 42%, Argon Fluoride Dry 2%, Krypton Fluoride 4%, and Mercury I-line 1%. Geographically, China represented 33% of system sales, followed by South Korea (25%), Taiwan (22%), the United States (12%), Japan (5%), and EMEA (1%).

While DUV systems still generated slightly more revenue than EUV in 2025, EUV’s share has rapidly increased to 48%—up from 38% in 2024. As chipmakers transition from 4nm to 3nm and 2nm nodes, the industry is shifting from multi-patterning DUV to single-exposure EUV technology.

EUV systems are seeing the strongest demand from DRAM manufacturers, followed by high-bandwidth memory and DDR. Greater EUV adoption is also expected to boost recurring revenues from the installed base. ASML closed 2025 with a robust order backlog of €38.8 billion, ensuring strong revenue visibility going forward.

ASML’s Unrivaled Position in EUV Technology

Although ASML competes with companies like Lam Research, Applied Materials, and KLA Corporation in the broader wafer equipment market, it maintains a near-monopoly in EUV lithography.

EUV technology is essential for manufacturing the most advanced chips at 3nm and below, giving ASML significant pricing power and strategic importance with major clients such as TSMC, Samsung, and Intel.

ASML is now pioneering High Numerical Aperture (High-NA) EUV systems for sub-2nm chip production, representing the next major innovation for the semiconductor industry. These advanced machines are expected to be central to future chip manufacturing, supporting the trend toward higher density and efficiency.

Analyst consensus for ASML’s 2026 earnings stands at $33.8 per share, reflecting an anticipated 21% year-over-year increase. This estimate has been revised upward in the past week.

Source: Zacks Investment Research

Should You Hold ASML Stock?

ASML’s dominant position in EUV technology and strong demand from the AI sector make it a compelling long-term holding. However, its high valuation may limit short-term gains. Currently, ASML is rated as a Hold (Zacks Rank #3).