The Motley Fool·2025-12-04 16:00Core Viewpoint - The rise of artificial intelligence (AI) is significantly boosting sales for both ASML Holding and Nebius Group, but ASML is identified as the superior investment option in the AI sector [1][2]. ASML Overview - ASML is the sole manufacturer of extreme ultraviolet (EUV) lithography equipment, giving it a monopoly in the market and making it a critical player in the AI ecosystem [3]. - The company is projected to achieve a 15% sales growth in 2025, reaching approximately 32.5 billion euros, up from 28.3 billion euros in 2024 [3]. - ASML has shown resilience in the cyclical semiconductor industry, with consistently rising revenues over the years [4]. - The diluted earnings per share (EPS) for ASML increased to 5.48 euros in Q3, up from 5.28 euros the previous year, with a commitment to grow dividends over time [6]. - Despite anticipated sales slowdowns in China, overall AI demand is expected to sustain revenue growth into 2026 [7]. Nebius Overview - Nebius has capitalized on the AI boom by providing optimized data center computing capacity, leading to a Q3 revenue of $146.1 million, a 355% increase year-over-year [11]. - The company estimates its 2025 sales will reach between $500 million to $550 million, a significant rise from $117.5 million in 2024 [11]. - Nebius faces challenges in rapidly expanding its facilities to meet demand, resulting in stock issuance and increased debt [12]. - The company's debt has surged to over $4 billion in Q3, compared to approximately $6 million a year ago, raising concerns about financial stability [13]. - Nebius reported a net loss of $119.6 million in Q3, worsening from a loss of $94.2 million in 2024 [14]. Investment Comparison - ASML's stock has appreciated about 50% over the past year, while Nebius's stock surged approximately 300%, making it appear attractive [16]. - However, ASML is deemed the better investment due to its stable, profitable business model with consistent sales and EPS growth [17]. - ASML's price-to-sales (P/S) ratio stands at 11, significantly lower than Nebius's P/S ratio of 63, indicating a more favorable valuation for ASML [18]. - The stronger financials and key position in the AI ecosystem further solidify ASML as the superior long-term investment choice over Nebius [19].