Most experienced investors understand that life-changing stocks come from world-changing companies. Think Amazon, or, more recently, Nvidia. The former arguably created the e-commerce industry it now dominates, while the latter's technology is the heart and soul of most artificial intelligence platforms. That's why so many of these two outfits' earliest shareholders were able to turn relatively modest investments into million-dollar positions.
Not every critical technology company makes for a life-changing stock, though. Sometimes, their tickers are merely better-than-average performers.
And this is a question that may be on investors' minds regarding ASML Holding (ASML 2.61%) right now. It's a hugely important semiconductor technology outfit. But, is it a millionaire-making prospect with nothing more than a fairly typical investment of $10,000 made today?
ASML's place in the chipmaking world
Have you ever wondered how semiconductor chips are made? There's actually more than one way. The most common way, however, is with light. Using a manufacturing process known as lithography, a light-based stencil (of sorts) is used to spray multiple layers of semiconducting material onto a silicon substrate. The more precise this light pattern is, the smaller the chips made with it can be.
One company dominates this market -- Netherlands-based ASML. Protected by tens of thousands of the right patents, this company controls most of the overall lithography market, and almost the entirety of the extreme ultraviolet (or EUV) lithography industry, and is responsible for making the world's highest-performance computer chips. You may know that Taiwan Semiconductor is the world's single biggest manufacturer of high-performance silicon. Well, for perspective, Taiwan Semiconductor is ASML's biggest customer.
Image source: Getty Images.
It's doing well, too. In 2024, the chipmaking technology powerhouse generated $33 billion in revenue, translating to a net income of $8.8 billion, a notable increase for the former but a slight decline for the latter. Still, that's a smashing success.
The question remains, however, could investing $10,000 in this company today turn you into a millionaire at any point in your lifetime?
Alarmingly inconsistent
At the risk of revealing the ruling too soon, no, a $10,000 investment made in ASML today isn't likely to make you a millionaire.
That doesn't make it a poor stock pick, though. Quite the contrary, actually. This technology company would be a solid addition to almost any growth portfolio.
There's one overarching downside to the nature of this company's business, however. That is, it's inconsistent. Chip companies like Taiwan Semiconductor, Samsung, or Intel -- all of which are existing ASML customers -- don't need to purchase new EUV lithography equipment every year. Indeed, with its newest machine sporting a sticker price of around $400 million apiece, even the biggest of chipmakers must think very carefully before committing to a purchase that's big enough to provide them with enough production scale to matter. In this vein, for perspective, ASML only sold a total of 380 new lithography units in 2024, plus another 38 used/refurbished ones... a fairly typical year.
More importantly to current and would-be shareholders, this type of big-ticket, one-off purchase business can lead to uncomfortably inconsistent results. For instance, while ASML's revenue soared by 69% in 2021, it contracted slightly in 2022. It jumped again in 2023, growing nearly 41%, but then fell a little more than 3% the following year. Its final top line for 2025 is likely to be 31% better than 2024's total, but analysts are already calling for a mere 5% year-over-year improvement in sales for 2026. This sort of inconsistency isn't conducive to long-term gains for any company's stock.
ASML Revenue (Quarterly) data by YCharts
This inconsistency also obscures the fact that since 2015, ASML's average annualized revenue growth rate has only been about 18%. That's impressive, to be sure. But it's not enough to lead to a million-dollar payoff.
And that will be especially true if China's efforts to build its own EUV lithography machines (by retro-engineering ASML's tech) meet its goal of building a working prototype as soon as 2028. Somehow it seems that Beijing won't be overly concerned if its homegrown tech tests or even outright violates ASML's patent protection, particularly if it means lower costs or more marketability for its own semiconductor manufacturers.
Not a bad stock, but now's still not the time
Again, don't read too much pessimism here. ASML has been a solid-performing stock, especially for long-term owners who've stepped in during one of its frequent -- and somewhat predictable -- dips.
NASDAQ: ASML
Key Data Points
This cyclical volatility isn't apt to change in the near or distant future either. So, if you're looking for a good way of rounding out and spicing up your technology or growth holdings, this name isn't a bad bet.
But maybe just not right now. ASML stock's 100% run-up from April's low leaves it a little too vulnerable to one of these many predictable pullbacks, which tend to coincide with the beginning of soft patches like the one expected for this year. You'd be better served by waiting for a sell-off. There are better bets to consider in the meantime.
