Could ASML become Europe's answer to NVIDIA?

With a market capitalization of $400 billion, ASML Holding (NASDAQ: ASML) is Europe’s most valuable stock, but does it have the potential to become the next Nvidia? 

The Dutch semiconductor firm is winning plaudits among some of the world’s leading institutions. In recent days, Wells Fargo raised its price target on the stock to $1,140, up from an initial $1,105, following what it deemed a ‘clean’ third-quarter earnings season. 

Buoyed by growing investor optimism, the stock rallied 45% through August and September, and strategic investments throughout Europe’s growing AI sector appear to point to a tech innovator with a keen eye for further growth. 

Could ASML really emulate the likes of NVIDIA and become Europe’s first trillion-dollar company? Let’s take a deeper look at the advantages and challenges facing the popular semiconductor stock: 

Earnings deliver cautious optimism

ASML’s quarterly earnings saw a $0.01 earnings-per-share beat on expectations of $6.36, posting sales of $8.71 billion in Q3 2025. 

However, it was the tech firm’s reported net bookings that really stole a march on the same period last year, with a total of $6.27 billion representing growth of 105%. 

For the fourth quarter, ASML appears to be optimistic, predicting sales of $11.05 billion based on the midpoint of its guidance, surpassing analyst models forecasting $10.8 billion. 

Closing out the calendar year, ASML anticipates sales rising 15% year-over-year, with a gross profit margin reaching around 52%. 

However, optimism has been quelled somewhat by the company expecting its sales to decline in China next year, despite forecasting total sales in 2026 to at least match its performance this year. 

Uncertainty over Chinese markets didn’t dampen the positive reception ASML’s earnings figures received, with the stock climbing more than 3% after reporting its Q3 revenues. 

Although the stock is dependent on sales in China to sustain its growth, the ongoing artificial intelligence boom has empowered more firms within the industry to build positive momentum. 

Given ASML’s key role in making equipment used in the manufacturing process of AI chips, the company has been recognized as a major player in powering artificial intelligence adoption rates as the technology continues to become more accessible at the enterprise level. 

Key differences to NVIDIA

NVIDIA (NASDAQ: NVDA) is another semiconductor firm that recently became the world’s most valuable stock, surpassing $4 trillion in market capitalization in July. 

While there are some similarities shared between ASML and NVIDIA, there are also some key differences that investors should be aware of. 

Although both companies have built a strong market position that involves their semiconductor hardware and component parts supplying key AI firms, ASML has a fundamentally different operational model from NVIDIA. 

ASML sells equipment that enables the production of advanced chips. NVIDIA, on the other hand, sells the actual AI chips and software, making comparisons between the two stocks much like comparing a construction firm to a construction machinery firm. 

Another reason why it’s hazardous for investors to compare ASML to NVIDIA is the geopolitical risks associated with ASML’s sales. Because the European company’s sales to China are directly impacted by export controls, ASML experiences a level of revenue volatility that NVIDIA, as a US-approved supplier, doesn’t have to contend with. 

Could ASML reach $1 trillionrillion? 

There are clear signs of ambition from ASML. The company’s recent $1.5 billion investment in French AI startup Mistral positioned ASML as the artificial intelligence firm’s largest investor. 

The long-term strategic partnership that came alongside the investment is set to see further exploration into the use of AI models throughout ASML’s product portfolio, as well as research, development, and operations, in a way that can benefit customers with a faster time to market and higher quality lithography systems. 

Whether or not ASML can reach a market capitalization of $1 trillion will depend on the stock overcoming the fragmented nature of European markets, which can see investor interest split across different nations. If the stock can earn recognition as a continental leader among investors globally, its path towards entering the $1 trillion club can be smoother. 

“With a forward price-to-earnings ratio of 34.01, ASML is clearly drawing some hype among investors and is a little expensive compared to the wider semiconductor market,” notes Steve Frauzel, Head of Market Insights at global brokerage brand Just2Trade. “Despite this, its fair value remains far below that of NVIDIA, and the stock’s strong market share means that there’s plenty of room for growth.” 

“As long as the ongoing AI boom carries on building momentum, there’s every chance that ASML can be Europe’s first $1 trillion stock. But if signs of weakness in Chinese sales manifest, price volatility could set in.” 

What’s next for ASML?

ASML is a European stock with plenty of potential, and its pivotal role in the semiconductor chip manufacturing process means that the firm stands as a key beneficiary of any positive sentiment building in the artificial intelligence industry. 

With more exposure to geopolitical challenges than semiconductor peers like NVIDIA, the stock remains a prospect for investors to treat with a sense of cautious optimism. However, for those who firmly believe in the long-term growth of AI, ASML remains a stock that deserves to be taken seriously.