We came across a bullish thesis on ASML Holding N.V. (NASDAQ:ASML) on Make Money, Make Time’s Substack by Oliver | MMMT Wealth. In this article, we will summarize the bulls’ thesis on ASML. ASML Holding N.V. (NASDAQ:ASML)'s share was trading at $705.68 as of Dec 20^th. ASML’s trailing and forward P/E were 38.21 and 27.62 respectively according to Yahoo Finance.

A technician operating a robotic arm on a production line of semiconductor chips.

ASML is currently trading at a 25.1x NTM EV/EBITDA, which may seem elevated given its 12% annual revenue growth. However, this valuation is supported by the robust demand for its products, particularly from its key customers like TSMC, Samsung, and Intel. These companies are investing heavily in semiconductor manufacturing, with significant subsidies recently awarded by the U.S. government: TSMC received $6.6 billion for its Arizona facility, Samsung was granted $6.4 billion for its Texas expansion, and Micron secured $6.1 billion. This heightened demand for semiconductor production directly boosts ASML, especially for its next-generation machines, which can sell for over $300 million. ASML’s management has also set ambitious goals, forecasting $60 billion in revenue by 2030, along with 800 basis points of margin expansion. If these targets are met, ASML’s EBITDA could grow to approximately $24 billion, nearly 2.7 times its current levels. Despite its current high valuation, the company's strong position in the semiconductor industry, with its critical lithography machines driving next-gen chip production, provides a compelling case for continued growth. Given these factors, ASML remains an attractive long-term investment.

ASML Holding N.V. (NASDAQ:ASML) is not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 64 hedge fund portfolios held ASML at the end of the third quarter which was 81 in the previous quarter. While we acknowledge the risk and potential of ASML as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ASML but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.