ASML: The Underrated AI Star Set to Surpass Palantir in 3 Years

Published Date : 21/09/2025 

While Palantir has been a star performer in the AI sector, ASML, a lesser-known but crucial company, is poised to outshine it in the coming years. Discover why ASML is the AI stock to watch. 

ASML is a key player in the AI world, but it often flies under the radar. However, this Dutch semiconductor equipment manufacturer is one of the most important companies in the tech industry, especially in the realm of AI. While Palantir Technologies (PLTR) has seen an astounding 2,660% rise from the start of 2023, there's another AI stock that I believe is even more promising. In three years, ASML (ASML) could easily be worth more than Palantir.

Palantir has been one of the hottest stocks in the market, driven by the growing enthusiasm for AI and its potential applications. However, the stock's meteoric rise has also pushed its valuation to unsustainable levels. Palantir's market cap has reached nearly $420 billion, compared to ASML's almost $365 billion. But this valuation is not as solid as it seems.

When I refer to ASML being worth more than Palantir, I'm not talking about the per-share price; I'm talking about its market capitalization. Market cap is a more accurate measure of a company's value, as it takes into account the total number of shares outstanding. Palantir's sky-high valuation is largely due to investor enthusiasm, which has pushed its price-to-sales ratio to 130 times and its forward P/E ratio to 275 times. These levels are rarely justified, especially when a company's revenue growth is only 48% year over year.

In contrast, ASML has a more reasonable valuation, considering its technological monopoly and strong growth prospects. ASML produces extreme ultraviolet (EUV) lithography machines, which are essential for manufacturing the complex computer chips used in AI applications. Without ASML's technology, the powerful chips that execute AI calculations would not be possible. ASML's technological monopoly and head start in this field give it a significant advantage over potential competitors.

ASML's management is projecting a market potential of 44 to 60 billion euros by 2030, up from the current 32.2 billion euros in trailing-12-month revenue. Given the conservative nature of ASML's estimates, I believe the company will achieve revenue on the higher end of this range. This strong growth potential, combined with ASML's reasonable valuation, makes it a solid investment.

While Palantir's stock is ripe for a significant pullback due to its overinflated valuation, ASML's stock is positioned for steady growth. The combination of ASML's technological leadership and the increasing demand for advanced semiconductor technology makes it a compelling choice for investors looking to capitalize on the AI revolution.

In conclusion, while Palantir has captured the spotlight, ASML is the hidden gem in the AI sector. With its technological monopoly and strong growth prospects, ASML is well-positioned to outperform Palantir and potentially be worth more in the next three years. For investors looking for a more sustainable and promising AI stock, ASML is the way to go. 

Frequently Asked Questions (FAQS): 

Q: What is ASML's main product?

A: ASML's main product is the extreme ultraviolet (EUV) lithography machine, which is essential for manufacturing advanced semiconductor chips used in AI applications.

Q: Why is Palantir's valuation considered unsustainable?

A: Palantir's valuation is considered unsustainable because its price-to-sales ratio is 130 times and its forward P/E ratio is 275 times, which are extremely high and not typically justified by its current revenue growth rate.

Q: What is the projected market potential for ASML by 2030?

A: ASML projects a market potential of 44 to 60 billion euros by 2030, indicating strong growth from its current trailing-12-month revenue of 32.2 billion euros.

Q: How does ASML's technological monopoly give it an advantage?

A: ASML's technological monopoly in EUV lithography gives it a significant advantage because it is the only company with this patented technology, and it would take years for any competitor to catch up.

Q: Why is ASML a better investment compared to Palantir?

A: ASML is a better investment compared to Palantir because it has a more reasonable valuation, a technological monopoly, and strong growth prospects, making it a more sustainable and promising AI stock. 

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