The Motley Fool·2025-10-09 09:30Core Viewpoint - ASML is positioned as a more attractive investment compared to Palantir, despite slower growth, due to its technological monopoly and reasonable valuation metrics [1][2][12]. Company Overview - ASML is the only company globally capable of manufacturing extreme ultraviolet (EUV) lithography machines, essential for high-end semiconductor production [3][5]. - The company provides critical machinery to major foundry clients, including Taiwan Semiconductor Manufacturing and Intel [3]. Technological Advantage - ASML's EUV machines enable the production of advanced microchips with trace spacing as small as 3 nanometers, with 2nm variants expected soon [4]. - The technological monopoly held by ASML is significant, as replicating this technology would require extensive research and substantial financial investment [5]. Market Demand - The increasing demand for AI chips is driving the need for more production capacity, leading clients to invest in additional ASML machines [6]. - ASML is expected to benefit from the growing requirement for advanced chips, positioning it as a strong investment opportunity [6]. Valuation Comparison - ASML's stock trades at 37 times forward earnings and 12 times sales, which is considerably lower than Palantir's valuation of 127 times sales and 269 times forward earnings [11]. - Even with aggressive growth projections for Palantir, its stock would remain more expensive than ASML's current valuation over the next five years [11]. Future Projections - ASML's management anticipates revenue growth to between 44 billion and 60 billion euros by 2030, up from 32 billion euros in the past year [12]. - This projected growth suggests that ASML's stock will likely appreciate over time, while Palantir's valuation may face corrections [12].