One signal

ASML is being pitched as the stronger AI-chip equipment investment than Applied Materials, despite trading at a higher valuation. The comparison matters because ASML controls the market for extreme-ultraviolet lithography, while Applied Materials has a broader equipment portfolio and a lower earnings multiple.

Why it matters

Insider Monkey reports that ASML trades at roughly 31 times forward earnings against about 27 times for Applied Materials. It says ASML generated €9.3 billion in second-quarter sales, with a 54% gross margin and €2.9 billion in net income. Applied Materials, meanwhile, reported record quarterly revenue of $9.12 billion, up 25%, with a 50.3% gross margin. The useful takeaway is not a stock tip, despite the article’s verdict. It is the trade-off: ASML offers a harder-to-replace position in leading-edge chipmaking, while Applied Materials is cheaper and less dependent on one technology category. Both remain exposed to AI-factory spending, geopolitics and export controls. Even a near-monopoly still has to mind the weather.

Discuss: Is ASML’s irreplaceable EUV position worth paying a premium for, or does Applied Materials’ broader and cheaper business make the better long-term case?

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