Choosing between ASML Holding (ASML +1.25%) and Qualcomm (QCOM +3.97%) in 2026 means weighing a hardware monopoly against a mobile chip leader that's working to diversify.
ASML provides the complex lithography tools the world's leading chipmakers use to etch tiny circuits onto silicon. Qualcomm, meanwhile, designs the processors and modems that power smartphones and vehicles worldwide. Both show up on lists of the best semiconductor stocks to own, but they occupy very different corners of the chip supply chain.
ASML & QCOM: Performance Comparison
Key Financial Metrics
The case for ASML Holding
ASML manufactures lithography systems, which are massive machines that use light to print patterns on silicon wafers. It is currently the only company in the world capable of producing extreme ultraviolet (EUV) machines. These tools are indispensable for manufacturing the smallest, fastest chips found in smartphones and data centers. The company serves major chipmakers like Intel, TSMC, and Samsung, providing hardware, software, and ongoing maintenance.
ASML reports its results in euros, and the figures here are converted to U.S. dollars. In fiscal 2025, revenue reached nearly $37.5 billion, up approximately 15.6% from the previous year. This performance led to net income of roughly $11.0 billion for the same period. The company maintained a strong net margin of approximately 29.4%, which measures how much of each dollar in sales turns into profit. This growth reflects the global push for higher computing power and the expansion of advanced chip manufacturing capacity.
As of its December 2025 balance sheet, the debt-to-equity ratio was roughly 0.2x. This ratio measures total debt against shareholder equity, with a lower number typically suggesting a lighter debt load relative to what owners have invested. The current ratio, which compares short-term assets to short-term liabilities, was roughly 1.3x. Free cash flow for the fiscal year reached nearly $12.2 billion, representing the cash remaining after the business pays for its operations and capital investments.
The case for Qualcomm
Qualcomm develops the wireless technologies and processors that power phones and other connected devices. Beyond its handset business, it's expanding into automotive and Internet of Things (IoT) segments. Major customers include Apple (AAPL +1.53%), Samsung, and Xiaomi (XIACF -1.63%), each accounting for 10% or more of revenue in fiscal 2025. This level of customer concentration adds risk to the business, particularly as some clients look to design their own components.
In fiscal 2025, which ended in September 2025, revenue reached about $44.3 billion, up nearly 13.7% from the prior year. Net income for the period was roughly $5.5 billion, for a net margin of about 12.5%. While revenue has grown from roughly $35.8 billion in fiscal 2023, net income fell from the $10.1 billion reported in fiscal 2024. The decline came from a one-time, non-cash tax charge of $5.7 billion that Qualcomm recorded after U.S. tax legislation passed in July 2025, a charge larger than the entire drop in net income.
As of its September 2025 balance sheet, the debt-to-equity ratio stood at approximately 0.7x. The current ratio was roughly 2.8x, indicating a strong ability to cover short-term obligations with liquid assets like cash and accounts receivable. Free cash flow for the fiscal year was nearly $12.8 billion, which gives the company plenty of room to fund research and development.
Risk profile comparison
ASML faces unique geopolitical risks because it is a critical bottleneck in the global chip supply chain. Export restrictions can limit its ability to sell advanced equipment to certain regions, potentially affecting future growth. The company also relies on the capital spending cycles of a few large chipmakers, such as Intel, TSMC, and Samsung. If these customers delay their factory upgrades, the company's order book can swing significantly.
Qualcomm deals with heavy revenue concentration among a small group of device manufacturers like Apple. These partners could vertically integrate, replacing Qualcomm's modems with internal designs. The company faces competition from rivals like Broadcom (AVGO +0.70%) and Nvidia (NVDA +0.22%). Its business in China also exposes it to trade tensions and evolving export controls that could disrupt sales to manufacturers like Xiaomi.
Valuation comparison
Qualcomm appears significantly cheaper on both earnings and sales multiples, while ASML trades at a premium reflecting its unique position in lithography.
| Metric | ASML Holding | Qualcomm |
|---|---|---|
| Forward P/E | 28.9x | 19.7x |
| P/S ratio | 17.3x | 4.8x |
Valuation metrics include sourcing from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?
ASML looks like the better buy to me, but I'd be a cautious buyer. The stock has run hard over the past year, and I'd want to see whether chipmakers pull back on AI spending before adding a full position.
Qualcomm's lower valuation makes more sense once you look at its latest results. Revenue for the first nine months of fiscal 2026 slipped slightly from a year earlier, and operating income fell by roughly a quarter. The company leans on a handful of phone makers and expects Apple to increasingly use its own modems. Automotive, IoT, and AI chips give Qualcomm options, but those markets still have to show they can reduce its dependence on phones.
ASML's position is much harder to copy. It's the only company that makes EUV machines, and it turns nearly a third of every sale into profit. Its order backlog at the end of 2025 was larger than a full year of revenue, and in July management raised its 2026 sales outlook to a range that implies growth of more than 30%. That's why the shares cost more on every multiple in the table above, and why a sharp pullback in chipmakers' spending would hit the stock hard.
For a long-term investor with a diversified portfolio, paying up for a monopoly tied to AI chip demand looks like a better bet than buying a cheaper stock that still has to prove it can grow. I'd add to the position gradually rather than all at once.
