ASML Invests 1.3B Euro in Mistral AI: Will it Deliver Growth?

Core Insights - ASML Holding is investing €1.3 billion in Mistral AI's Series C funding round, acquiring an 11% stake and a seat on Mistral's Strategic Committee [1][9] - The partnership aims to integrate AI into ASML's products and operations, enhancing lithography tools and improving performance for chipmakers [2][9] - ASML reported Q2 2025 revenues of €7.7 billion, a 23% year-over-year increase, driven by demand for AI-related chips [3][9] Financial Performance - ASML's revenue backlog stands at €33 billion, with expectations for strong demand for memory and logic chips used in AI to continue through 2026 [3] - The Zacks Consensus Estimate predicts a 23.8% year-over-year revenue increase for ASML in 2025 [4] - ASML's shares have increased by 17.4% year-to-date, compared to a 22.3% growth in the Zacks Computer and Technology sector [7] Competitive Landscape - ASML's competitors, Applied Materials and Lam Research, are also focusing on AI demand, with Applied Materials reporting $7.3 billion in sales for Q3 2025 [5][6] - Lam Research has seen success with its new Akara etch tool, indicating a competitive push in the AI chipmaking space [6] Valuation and Earnings Estimates - ASML trades at a forward price-to-sales ratio of 8.52, higher than the sector average of 7.09 [10] - The Zacks Consensus Estimate for ASML's earnings indicates a year-over-year increase of approximately 35.6% for 2025 and 0.7% for 2026, with recent upward revisions [13]