In his keynote from GTC 2026 on March 16, Nvidia (NVDA +1.73%) CEO Jensen Huang reflected on his prior guidance for $500 billion in Blackwell and Rubin purchase orders through 2026. Now he sees at least $1 trillion in artificial intelligence (AI) chip orders through 2027, and said he was certain computing demand would be much higher than that. Note that these are orders that would be realized over a multiyear period.
Earlier this month, Broadcom (AVGO +4.27%) CEO Hock Tan forecast $100 billion in fiscal 2027 revenue from AI chips alone.
As recent research by The Motley Fool shows, Amazon, Microsoft, Alphabet's Google, and Meta Platforms are expected to approach $600 billion in combined 2026 capital expenditures, with a lot of that going toward AI.
This AI spending spree wouldn't be possible without ASML (ASML +4.97%).
Here's why ASML could become the first European company to reach $1 trillion in market capitalization, and if it's a buy now.
Image source: Getty Images.
ASML's invaluable role in semiconductor manufacturing
AI chips are becoming more efficient through innovations from companies like Nvidia and Broadcom, improvements in networking and codesign, and new techniques such as Taiwan Semiconductor Manufacturing's (TSM 0.84%) (TSMC) advanced 2-nanometer (N2) process technology. N2 entered high-volume manufacturing in the fourth quarter of 2025.
Technologies like Nvidia's Rubin architecture will likely use N2 to improve energy efficiency and power for high-performance computing AI workloads. Pushing the bounds of semiconductor manufacturing is a boon for ASML.
Semiconductor foundries like those operated by TSMC, Samsung Electronics, and Intel depend on highly advanced semiconductor machinery for the various stages of chip manufacturing, from deposition to lithography, plasma etching, polishing, metal deposition, and process control solutions.
ASML specializes in the lithography part of this process, which is often considered the most complicated. ASML has competitors in deep ultraviolet technology, but it has a virtual monopoly over extreme ultraviolet (EUV) systems, which are primarily used to produce advanced AI chips.
Demand for EUV is soaring, as high-margin EUV machines are making up an increasingly larger percentage of ASML's bookings. Its most advanced High NA EUV machines are still reaching commercial scale, as ASML confirmed revenue from just two of these systems in its latest quarter (fourth quarter 2025) compared to 94 new lithography systems units sold.
ASML and its semiconductor equipment peers, such as Lam Research, Applied Materials, and KLA, benefit from accelerating demand for AI chips. ASML has a long runway for growth as it ramps deliveries of its latest EUV machines. And it also benefits from a recurring revenue stream from servicing existing machines in operation -- with installed base management sales accounting for a quarter of total 2025 sales.
NASDAQ: ASML
Key Data Points
An elite stock at a premium valuation
ASML is a foundational AI stock to build a portfolio around. Mid-teens double-digit earnings growth or better could pole vault ASML to a $1 trillion market cap in the next three to five years -- considering its market cap is already $540 billion at the time of this writing.
The main challenge with ASML isn't its business model, but its valuation. ASML sports a price-to-earnings (P/E) ratio of 49.3 and a forward P/E of 39.8 compared to a 10-year median P/E of 35.8. Given its invaluable market position in AI, ASML deserves a premium valuation. But it puts pressure on the company to perform, and leaves ASML more vulnerable to a cyclical slowdown in AI spending.
