Core Viewpoint - ASML is positioned for a strong 2026, driven by the adoption of High-NA EUV technology and robust demand from regions outside China, despite a projected decline in sales from the Chinese market [1][5]. Group 1: High-NA EUV Technology - The semiconductor industry has officially entered the High-NA EUV era, with each system costing approximately $380 million, enabling manufacturers to create features nearly half the size of current EUV systems, crucial for advanced nodes like 1.4nm and 1nm [3]. - Intel has completed acceptance testing for its first High-NA systems for mass production, while Samsung has begun receiving deliveries for its upcoming 2nm foundry line [3]. - ASML's unique position as the sole supplier of High-NA EUV systems creates a significant competitive barrier, ensuring its critical role in the industry for the next decade [3]. Group 2: Chinese Market Normalization - China has been a major customer for ASML, contributing over 40% of sales during 2024-2025, but stricter regulations are expected to lead to a significant decline in revenue from this market in 2026 [5]. - Despite the downturn in China, ASML's management anticipates that total net sales in 2026 will not fall below 2025 levels, supported by strong demand from Taiwan, the U.S., and South Korea [5]. - Geopolitical pressures are reshaping ASML's market strategy, emphasizing the necessity of its tools while reducing reliance on regional policy fluctuations [5]. Group 3: DRAM and HBM Growth Cycle - The demand for generative AI is driving a significant increase in high-bandwidth memory (HBM) and advanced DRAM investments, creating a critical bottleneck in the AI supply chain [7]. - Major storage companies like SK Hynix and Micron are rapidly expanding their EUV production capabilities to meet the surging demand from data center clients [7]. - This trend provides ASML with a strategic growth avenue, diversifying its customer base beyond logic chip manufacturers to include storage manufacturers, which is vital for maintaining strong order volumes in 2026 [7]. Group 4: Stock Attractiveness - ASML's current trading price reflects a 45x multiple on expected earnings for fiscal year 2026, indicating a premium due to its direct benefits from the AI-driven capital expenditure cycle [9]. - Tech giants are projected to invest over $400 billion in AI infrastructure in 2026, with a significant portion directed towards advanced chips requiring ASML's lithography equipment [9]. - The lack of substantial competitors in cutting-edge lithography technology positions ASML favorably, with a strong order backlog and persistent demand supporting its investment thesis [9].