Admittedly, ASML (ASML -1.32%) may seem too low profile to become a top artificial intelligence (AI) pick. As an equipment supplier, only fab companies deal with it directly. As a result, it is lesser known, even billing itself as the "most important tech company you have never heard of."

However, the stock appears to have become more critical amid the rise of AI. AI applications tend to require the most advanced semiconductors available, a trend that plays into the hands of ASML. Due to the rising demand for chips, ASML looks like an excellent long-term investment and is arguably the most important company for the advancement of AI.

Why ASML?

Indeed, ASML's anonymity has begun to disappear as investors become more aware of the company's importance. It is the leading producer of extreme ultraviolet lithography (EUV) machines, the equipment needed to make the world's most advanced chips.

Consequently, the massive demand for AI-ready chips and advancements in that technology have brought more attention to the manufacturing process. To meet this demand, investors tend to focus on top semiconductor manufacturers such as Samsung, Taiwan Semiconductor, and Intel.

Nonetheless, investors should also remember that Nvidia's AI-ready H100 chips cannot exist without ASML's equipment. Thus, ASML probably belongs on investor watch lists for that reason alone.

Additionally, governments worldwide have become increasingly concerned about two-thirds of all third-party chip manufacturing taking place in Taiwan. To this end, the U.S. government, the European Union, and other entities have approved tens of billions in subsidies to build fabs in their home regions. This will further increase demand as many developed countries work to bring semiconductor production home.

Still, that demand may pause in 2024. U.S. and Dutch regulators have restricted the sale of some equipment to China. This will likely lead to negligible revenue growth (or even a slight pullback) in 2024.

ASML by the numbers

However, with rising demand for AI chips, ASML's performance beyond 2024 could more closely resemble 2023's results. In 2023, net sales of almost 28 billion euros ($30 billion) rose 30% versus year-ago levels.

During that time, ASML increased operating expenses by 39%. This was primarily due to higher research and development costs, money probably invested to maintain its technical lead. Despite that spending, its net income was 7.8 billion euros ($8.5 billion), a 39% increase over the previous year.

That profit increase, along with rising interest in the stock, helped push ASML's stock price higher by 50% over the last year. Despite that increase, the P/E ratio is about 45, a level near historical averages. Still, with the profit growth the company has seen amid massive investments in semiconductor manufacturing, the stock appears to have room for further growth in the long term.

Consider ASML stock

When it comes to AI investing, ASML is the root of the AI industry. Due to its dominance in the EUV machine market, it is the gatekeeper of the fast-growing AI chip industry.

Between rising demand for AI chips and the urgency of some governments to bring production home, demand for its EUV machines is set to rise. Thus, even at a moderate P/E ratio, investors will likely profit from the stock in the coming years as ASML does its part to make the AI revolution possible.