ASML Holding: Steady and Gradual Quarterly Revenue Growth

ASML Holding (NASDAQ:ASML) generates its revenue primarily by supplying advanced extreme ultraviolet lithography equipment, specialized wafer inspection systems, and related computational control software to integrated circuit manufacturers operating in locations across the globe.

It recently announced plans to increase manufacturing capacity for specific immersion systems by 30%, launched a collaborative industry initiative with multiple foundries for larger photomasks, and initiated construction on an additional corporate engineering campus in the Netherlands.

SK Hynix: Rapid and Sustained Quarterly Revenue Expansion

SK Hynix (NASDAQ:SKHY) earns its revenue primarily by designing, producing, and selling a wide variety of advanced memory semiconductors, including various customized flash memory products tailored specifically for complex technical computing and mobile applications.

It recently completed an oversubscribed initial listing of its American Depositary Receipts on the Nasdaq exchange, reassigned three senior vice chairpersons to oversee global strategy, and simultaneously faced a class action antitrust lawsuit regarding component pricing.

Why Revenue Matters for Investors

Revenue provides individual investors with a transparent, direct baseline measurement of all incoming capital over a specific timeframe before any operational business expenses are formally deducted. Closely tracking this top-line financial figure helps investors understand the total scale and growth trajectory of a business.

Quarterly Revenue for ASML Holding and SK Hynix

Calendar quarter	ASML Holding Revenue	SK Hynix Revenue
Q3 2024	$8.2 billion (quarter ended Sept. 30, 2024)	$12.9 billion (quarter ended Sept. 30, 2024)
Q4 2024	$9.9 billion (quarter ended Dec. 31, 2024)	$14.1 billion (quarter ended Dec. 31, 2024)
Q1 2025	$8.2 billion (quarter ended March 31, 2025)	$12.1 billion (quarter ended March 31, 2025)
Q2 2025	$8.7 billion (quarter ended June 30, 2025)	$15.8 billion (quarter ended June 30, 2025)
Q3 2025	$8.8 billion (quarter ended Sept. 30, 2025)	$17.6 billion (quarter ended Sept. 30, 2025)
Q4 2025	$11.3 billion (quarter ended Dec. 31, 2025)	$22.6 billion (quarter ended Dec. 31, 2025)
Q1 2026	$10.3 billion (quarter ended March 31, 2026)	$35.7 billion (quarter ended March 31, 2026)
Q2 2026	$10.8 billion (quarter ended June 30, 2026)	$52.6 billion (quarter ended June 30, 2026)

Data source: Financial Modeling Prep. ASML Holding's figures are converted from euros to U.S. dollars. SK Hynix's figures are converted from South Korean won to U.S. dollars. Data as of Sept. 25, 2026.

Foolish Take

For investors interested in gaining exposure to the artificial intelligence boom, ASML and SK Hynix are two great companies to invest in. Both provide key products to the AI industry, and as a result, are seeing year-over-year revenue growth.

That said, examining their sales trends provides investors with revealing insights. ASML's extreme ultraviolet (EUV) lithography equipment is essential for semiconductor manufacturers to produce AI chips, giving the company a legal monopoly since competitors have not been entirely successful in providing rival EUV tools. However, the complex machinery takes time to build, resulting in a slow revenue ramp for ASML.

In contrast, SK Hynix manufactures high-bandwidth memory (HBM) products, which can be produced faster. The company's massive sales growth in recent quarters is evidence that tech giants are pouring funds into memory components right now. The demand is so great, it's led to rising memory prices, which further fuels SK Hynix's spectacular sales ascent.

Robert Izquierdo has positions in ASML. The Motley Fool has positions in and recommends ASML. The Motley Fool has a disclosure policy.

ASML Holding (NASDAQ: ASML) and Applied Materials (NASDAQ: AMAT) are both benefiting from the artificial intelligence (AI) chip boom but in very different ways.

ASML's extreme ultraviolet (EUV) lithography machines are used to print the most complex circuits in leading-edge chips. As chipmakers pack more computing power into smaller chips, they need more precise manufacturing equipment. This trend has been driving demand for ASML's systems.

Applied Materials is also playing a crucial role in manufacturing advanced chips. The company supplies equipment used at several stages of chip production, including creating and shaping materials, checking for defects, and packaging chips together. Demand for these tools is rising as AI chips become more complex and increasingly use technologies such as high bandwidth memory and advanced packaging.

Let's see which stock is the better choice for investors right now.

ASML's impressive demand visibility

ASML's position as the only commercial supplier of EUV lithography systems is well established. The company has exceptionally strong visibility into demand for 2027. Revenue rose by nearly 21.2% year over year to 9.3 billion euros in the second quarter of 2026 (ending June 28). The company expects net sales in 2026 to fall in the range of 43 billion to 45 billion euros.

Low-NA EUV, ASML's current-generation extreme ultraviolet lithography technology, is used to print extremely small circuit patterns on advanced chips. The company expects to increase low-NA EUV capacity by roughly 30% in 2027, from around 65 systems in 2026. Yet management says it is already close to receiving all the low-NA EUV orders it needs for 2027. This suggests production capacity, rather than a lack of customer orders, could become the bigger near-term constraint.

ASML's newer High-NA EUV technology is another potential growth driver. High-NA EUV allows chipmakers to print even smaller and more precise features on advanced chips than ASML's current EUV systems. This technology is already moving into commercial production.

Intel is using High-NA EUV on selected layers of chips made with its Intel 18A manufacturing process. The company says it has already begun shipping the first high-volume logic product manufactured using High-NA EUV.

Applied Materials has multiple AI-powered growth drivers

Applied Materials is particularly well-positioned in some of the fastest-growing areas of semiconductor equipment spending. The company says that leading-edge chip manufacturing, DRAM memory, and advanced packaging are driving roughly 80% of the growth in wafer fabrication equipment spending.

Financial results were also impressive. The company's revenue jumped 25% year over year to $9.1 billion, while generally accepted accounting principles (GAAP) earnings per share rose 43% year over year to $3.17 in the third quarter of fiscal 2026 (ending July 26). Management also expects advanced packaging revenue to grow more than 70% in calendar 2026.

Hence, Applied Materials is benefiting not only from customers making more chips but also from the increasing complexity of AI chips, which require more manufacturing steps.

However, investor expectations also seem to have risen sharply. Shares of Applied Materials have soared by nearly 89.4%, while ASML stock is up by roughly 65.6% so far in 2026 (as of Sept. 28). Applied Materials' shares also fell more than 5% after its third-quarter earnings report, even though the company reported strong growth and issued revenue guidance above Wall Street's expectations.

Reuters attributed the decline to already-high investor expectations. This suggests the market may now require more than just strong results from the company.

China creates different risks for the two companies

Both technology companies face restrictions on selling certain advanced chipmaking equipment to China, but the risks differ significantly for each.

ASML expects China to account for around 20% of its total 2026 sales. China has also started producing its own immersion deep ultraviolet (DUV) lithography machines, an older but still widely used technology for printing circuit patterns on chips. However, Reuters reported that these systems are still being tested and remain behind ASML's technology and reliability.

Applied Materials also has significant exposure to China. China accounted for 28% of the company's total revenue in the third quarter. The company also faces a more immediate competitive threat from Chinese equipment makers in some of its core markets.

Reuters reported that Samsung Electronics and SK Hynix have been testing equipment from Chinese chip-equipment maker Advanced Micro-Fabrication Equipment at their factories in China. Chinese suppliers are making progress in areas such as etch and deposition, where Applied Materials also competes.

Hence, ASML could eventually face greater competition in DUV lithography, but China still lacks a commercial alternative to its advanced EUV systems. Applied Materials faces a more immediate threat, since Chinese suppliers are already gaining ground in some of the etch and deposition markets where it competes.

Which stock is a better pick over the next year?

ASML is trading at roughly 30.8 times forward one-year earnings, compared with about 27.4 for Applied Materials (as of Sept. 28). Yet analysts expect the consensus EPS to grow roughly 35% year over year for ASML and almost 44.3% for Applied Materials in the next fiscal year. So Applied Materials appears to be offering faster expected growth at the lower valuation multiple.

Hence, for the next year, Applied Materials seems to be a better pick. ASML offers stronger demand visibility and a harder-to-replicate moat, but Applied Materials' lower valuation and faster expected earnings growth make it a more attractive short-term pick. But investor expectations are already high, so Applied Materials will need to keep delivering strong results to see robust share price returns in the next year.

Manali Pradhan, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML, Applied Materials, and Intel. The Motley Fool has a disclosure policy.

As the demand for high-performance computing accelerates, investors often struggle to choose between the architects of chip design and the manufacturers of chipmaking hardware. Choosing between Arm (NASDAQ:ARM) and ASML (NASDAQ:ASML) requires understanding their distinct roles.

Arm licenses its intellectual property to hundreds of companies, earning royalties on nearly every smartphone sold globally. Meanwhile, ASML provides the essential machinery that allows foundries to print those designs onto silicon. Both companies are vital players among semiconductor stocks, but they offer different paths to growth.

The case for Arm

Arm operates a high-margin business model centered on licensing its compute platform and central processing unit designs. The company provides the fundamental blueprints that power the mobile world and is increasingly gaining traction in the automotive and cloud data center sectors. Because it does not manufacture physical chips, its asset-light model allows it to scale across the entire industry without the heavy costs of factory ownership.

In the fiscal year ended March 31, 2026, revenue reached nearly $4.9 billion, representing growth of approximately 22.8% compared with the prior fiscal year. The company reported a net income of roughly $904.0 million for the period. While its net margin of approximately 18.4% was slightly lower than the previous year, the company continues to see strong adoption of its latest architecture versions.

As of its March 2026 balance sheet, the current ratio stands at approximately 6.0x, which measures a company's ability to cover its short-term liabilities with its short-term assets. The debt-to-equity ratio, which compares total debt to shareholder equity, is roughly 0.1x. Note that stock-based compensation represented roughly 69% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.

The case for ASML

ASML occupies a unique position as the sole provider of extreme ultraviolet lithography machines. These massive, highly complex tools are the only way for chipmakers to produce the smallest and most advanced transistors. This technological moat makes the company an indispensable partner for any foundry aiming to support modern artificial intelligence applications.

In the fiscal year ended Dec. 31, 2025, revenue reached nearly $37.1 billion, a growth of approximately 15.6% over the prior fiscal year. The company achieved a net income of close to $10.9 billion for the year. This resulted in a healthy net margin of approximately 29.4%, reflecting the premium pricing power that comes with its specialized equipment monopoly.

As of its December 2025 balance sheet, the current ratio is approximately 1.3x. Its debt-to-equity ratio is roughly 0.1x, suggesting a conservative use of leverage relative to its equity. The company generated approximately $12.1 billion in free cash flow, which is the cash remaining after a business pays for its operating expenses and capital expenditures.

Risk profile comparison

Arm faces risks related to the concentration of its architecture in the mobile market, where growth has slowed compared to earlier decades. The company also contends with the rise of open-source alternatives like RISC-V, which could eventually challenge its licensing dominance. Additionally, geopolitical tensions can impact its ability to license technology in certain sensitive regions, potentially limiting its total addressable market.

ASML is highly sensitive to the capital expenditure cycles of a few major chip manufacturers. If these customers delay their expansion plans, the company's hardware orders can experience significant volatility. Furthermore, international trade restrictions on advanced lithography tools, particularly regarding shipments to certain markets, remain a persistent challenge that could cap its long-term revenue potential.

Valuation comparison

ASML appears significantly cheaper on a relative basis when comparing both its premium to earnings and its valuation relative to total sales.

Metric	Arm	ASML
Forward P/E	139.3x	39.2x
P/S ratio	64.3x	16.4x

Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy in 2026?

I'd go with ASML. Its position in the semiconductor industry is one of the most defensible in the world: It is the only company that makes the extreme ultraviolet lithography machines needed to produce the most advanced chips. Every chipmaker building AI hardware depends on ASML's equipment to do it, and there is no alternative. That kind of irreplaceable role in the global technology supply chain is extraordinarily rare.

There is a lot to like about how Arm makes its money. Its architecture powers virtually every smartphone, and royalty revenue more than doubled in the data center segment. This is a business that compounds reliably without depending on any single product cycle. For investors who value consistency and steady growth, it is a strong long-term hold.

Both companies benefit from the AI build-out, but from different angles. Arm earns a royalty when a chip is designed, while ASML earns revenue when that chip gets built. But as chip demand keeps growing, ASML sits at the only chokepoint in the entire supply chain that cannot be worked around. For a long-term investor, that is a compelling place to put your money.

Sara Appino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML and Arm Holdings. The Motley Fool has a disclosure policy.

As the artificial intelligence boom shifts from hype to hardware, choosing between Applied Materials (NASDAQ:AMAT) and ASML(NASDAQ:ASML) requires understanding the specialized tools that make modern computing possible.

These giants operate at different stages of the manufacturing process. While one provides a broad suite of materials engineering tools, the other holds a near-monopoly on the machines that print patterns on advanced chips.

The case for Applied Materials

Applied Materials sells a wide variety of equipment used to deposit, remove, and modify materials on silicon wafers. Its customers include global leaders in the foundry, logic, and memory markets who depend on these tools to build complex chip architectures. In fiscal 2025, two customers accounted for approximately 19% and 15% of net revenue, respectively, while a partnership with TSMC supports critical technology requirements for artificial intelligence.

In FY 2025, revenue reached nearly $28.4 billion, which represents growth of approximately 4.4% compared to the prior year. The company reported net income of close to $7.0 billion for the same period, demonstrating its ability to remain consistently profitable in a shifting market. This resulted in a net margin of 24.7%, which is a measure of how much profit is kept from every dollar of sales after all expenses are paid.

As of its October 2025 balance sheet, the debt-to-equity ratio was roughly 0.3x, which compares total debt to shareholder equity to show conservative borrowing levels. The current ratio, measuring the ability to pay short-term debts with short-term assets, was approximately 2.6x. Free cash flow, or the cash remaining after paying for capital expenditures, totaled nearly $5.7 billion and supports the company's ongoing research and development efforts along with its shareholder returns.

The case for ASML

ASML is the sole global provider of extreme ultraviolet (EUV) lithography systems used to print incredibly small patterns on the most advanced chips. By supplying these mission-critical machines to the broader semiconductor stocks landscape, the company has become an essential partner for every major manufacturer. Its proprietary technology is fundamental to the production of high-performance processors used in artificial intelligence and sophisticated mobile devices that require massive computing power.

In FY 2025, revenue reached close to $37.1 billion, representing growth of roughly 15.6% over the prior year. The company reported net income of approximately $10.9 billion during this fiscal year, showing substantial growth in its bottom line. It achieved a net margin of 29.4%, which shows that the business converts a high percentage of sales into actual profit for its shareholders after accounting for all operating costs.

As of its December 2025 balance sheet, the debt-to-equity ratio was approximately 0.1x, which indicates a very light debt load compared to its equity base. The company maintained a current ratio of roughly 1.3x, which compares short-term assets to short-term liabilities to assess the company's immediate liquidity. Free cash flow for the fiscal year reached nearly $12.1 billion, providing the company with ample capital to develop the next generation of high-aperture lithography machines.

Risk profile comparison

Applied Materials faces ongoing costs and scrutiny regarding export control compliance, including a $252 million settlement in February 2026. The business is highly sensitive to geopolitical trade tensions between the U.S. and China, which can disrupt supply chains. Furthermore, its reliance on a few large customers like Intel (NASDAQ:INTC) and competition from firms like KLA (NASDAQ:KLAC) makes it vulnerable to shifts in spending cycles.

ASML operates under strict export restrictions that limit its ability to sell advanced systems to certain markets, particularly China. Because its machines are incredibly complex, any disruption in its global supply chain can significantly delay deliveries and impact revenue. Additionally, the high cost of its next-generation machines may lead to slower adoption by customers like Advanced Micro Devices (NASDAQ:AMD).

Valuation comparison

Applied Materials looks cheaper than ASML based on its Forward P/E, which tracks price against earnings estimates, and its P/S ratio measuring sales over the past twelve months.

Metric	Applied Materials	ASML
Forward P/E	36.1x	39.2x
P/S ratio	11.9x	16.4x

Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy in 2026?

Although both companies are extraordinary, ASML is the clear winner here. Its position in the semiconductor industry is unlike almost anything else in the market: It is the only company in the world that makes the EUV machines needed to produce the most advanced chips. Every chipmaker racing to build AI hardware, from TSMC to Samsung to Intel, depends on ASML's equipment to do it. That kind of monopoly position is extraordinarily rare.

The most recent quarter backed that up convincingly. Revenue grew more than 20% year over year, the company raised its full-year outlook substantially, and AI-driven demand for advanced logic and memory chips keeps pulling orders forward.

Applied Materials is a strong business with broad exposure across chip manufacturing equipment. But it operates in a more competitive landscape where customers have alternatives. ASML has no real competition at the cutting edge of chip manufacturing. For investors thinking in years rather than quarters, owning that kind of irreplaceable position in the global technology supply chain is a straightforward long-term thesis.

Sara Appino has positions in Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends ASML, Advanced Micro Devices, Applied Materials, Intel, KLA, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.