ASML 凭借其 EUV 光刻垄断地位和高壁垒，是长期核心买入并持有的标的。2026 年第三季度销售额同比增长 55%；需求超过产能的状况将持续两年，因此产能限制应会使增长平稳延续至 2027-28 年。增长放缓仍有可能，但整体增长和利润增长均在推进之中。

But today, we're gonna be talking about ASML, which is kind of a big deal, in case you haven't noticed, in the semiconductor industry.

ASML fits into that little blue box down there at the bottom right, wafer fab equipment. They also have some packaging and assembly equipment as well. One of the most important companies in semiconductor manufacturing because they have a monopoly on lithography. Specifically EUV lithography.

lots of talk for the duration of this bull market really about ASML losing that monopoly as China makes progress on developing its own lithography machines. Both DUV immersion and the latest and greatest EUV extreme ultraviolet.

there aren't really any moats, but there really are some moats. ASML would be one. It is kind of a cliche to call it a moat, in our opinion, but there is definitely very, very high barriers to entry in this part of the manufacturing supply chain.

So ASML has kind of a moat, and they move fast. In their earnings report, they talked about a number of things they're working on, that won't provide any revenue for some years, like well into the twenty thirties, but they're already planning that.

Something to be said for that if you're looking for a long-term buy and hold core position in a tech portfolio. And what's great about getting an ASML earnings report is it kinda gives you an idea of what's happening with some of these other wafer fab equipment companies as well, so we can make some deductions based on what ASML says.

Installed base management, that's the yellow bar, it's eight point five billion euros. Last year, for reference, in twenty twenty-five, that metric was eight point two billion euros, so obviously we're gonna see a big bump up there as well.

Logic in blue, eleven billion euros. For reference, last year, sixteen point one billion euros. And then memory in green, ten point three billion euros, a huge increase from last year, eight point four billion euros for the whole year.

Now remember, this is only through Q3, so they have an entire quarter's worth of earnings to go. And that one remaining quarter is going to be quite significant. The Q3 2026 sales, 11.66 billion, almost 11.7 billion euro.

Big increase from the same period last year. That is a 55% year-over-year increase.

This tripped up a lot of investors, unfortunately, the last few years. The nature of the sales cycle for ASML and the other Fab Five is such that revenue kind of comes in fits and starts.

That ended up not being true. As you just mentioned in the previous slide, memory has picked up a lot of that slack, and then also the equipment upgrades in the service segment.

They also sell some metrology equipment for overlay, metrology when a company is doing exposure passes on the wafer. But the fact remains it is still a pretty lumpy sales cycle, and a lot of investors were thinking ASML is going to be a loser in the AI economy.

They're just not selling that many lithography machines.

A little bit of patience went a long way here because they are very much benefiting from the upgrade cycle in AI. Some of their fab partners just needed to fill up the current capacity they had already built first before buying more equipment now.

We'll take a look at their net income. You can see the very large growth. In this most recent quarter, net income came in at nearly €5 billion. Now, 500 million of that, or about 10%, was because of that investment they made in Mistral AI.

But even if you back that out, still a really large increase in their profitability and their net income. Free cash flow has been very lumpy for ASML. We've talked about that many times.

This is just cyclical business. As you said, revenue and sales comes in fits and starts, but this most recent quarter, tons of free cash flow.

Yeah, and in addition to the sales cycle, there's also ASML managing its own manufacturing capacity, which also affects this. They have been investing to increase the amount of machinery they can crank out for their customers, so that has an effect on their free cash flow.

But yeah, obviously this cycle, there was that benefit, the higher installed base revenue, which generally carries a pretty high profit margin. So, all things pointing towards ASML being in a really strong position to close out 2026, and now we should probably shift our attention to 2027 and 2028.

Because the last time we did a publicly available video on ASML was back in spring, after Q1 2026, and we called out, based on not just ASML's comments, but also some commentary from elsewhere in the semiconductor industry, that 2028 could be a slowdown year.

Not a contraction year, but at the very least a slowdown year for the semiconductor manufacturing supply chain.

Maybe that's not the case anymore. Based on what management said, that is most definitely not the case. Here's a look at what management said about ASML's outlook. We have the June 2027 Capital Markets Day, which is eight months away at this point.

But that will be a big indicator in what happens at the finality of 2027 and through 2028.

But right now, what we can see is the Q4 2026 midpoint outlook is another 52% year-over-year revenue growth for Q4 2026, and gross margin expanding to new records around 57%, driven by that big equipment upgrade and service mix.

And it would appear that that trend right there is set to continue in 2027. The revenue mix looks pretty favorable. And then also into 2028, management was saying that they're now not expecting to be able to fully meet customer demand for the next two years.

And so they're investigating whether or not they should once again increase their manufacturing capacity for 2028 and beyond.

They had previously said 30% increase in their capacity to meet customer demand, so they're already looking at possibly needing to expand that again because a lot of customers are trying to pull in fab capacity, their own ability to manufacture wafers and chips, in the next two years based on all of this AI demand.

We're of the viewpoint here that being capacity constrained for ASML is actually a good thing.

But for ASML, being capacity constrained isn't such a bad thing. It will have the effect of potentially smoothing out the revenue growth a bit more over the course of the next two years and perhaps beyond, before there's a more significant slowdown in the revenue growth trajectory.

And in a market where there's more competition, that's maybe not such a good thing because if you can't meet customer demand, someone else will. But ASML has the benefit of now and for the foreseeable future, many years into the future, being the only place where you can get EUV lithography, some of the more higher-end immersion lithography, metrology to do the overlay, critical dimension measurements.

So it's not a bad thing for ASML to have this problem on their hands. And so, yeah, I think we had maybe called out a possible slowdown that the market was looking at coming into play two years from now.

And to be clear, there still could be a slowdown in the growth trajectory, but it most certainly looks like overall growth and profit growth is going to be very much in play for ASML.

There's been a general equipment stock sell-off since the end of June. ASML has actually weathered that pretty good, but some of the others have taken it a little bit harder.

And so if you've been waiting for a period where you would like to add to these companies, it looks like there is some favorable pricing going on for some of these companies because of that outlook through mid-2028.