Nvidia is a semiconductor powerhouse that is playing a pivotal role in the growth of AI.
Without the necessary hardware, the fabrication of advanced semiconductors isn’t possible.
While semiconductor stocks have soared recently, there are still bargains to be found.
10 stocks we like better than ASML ›
It’s hard to argue against Nvidia. An absolute juggernaut, Nvidia retains a dominant leadership position with respect to designing semiconductors, …
Nvidia is a semiconductor powerhouse that is playing a pivotal role in the growth of AI.
Without the necessary hardware, the fabrication of advanced semiconductors isn’t possible.
While semiconductor stocks have soared recently, there are still bargains to be found.
10 stocks we like better than ASML ›
It’s hard to argue against Nvidia. An absolute juggernaut, Nvidia retains a dominant leadership position with respect to designing semiconductors, and its contributions to the growth of the artificial intelligence (AI) industry are nearly impossible to overstate.
To even suggest that Nvidia doesn’t warrant one of the top spots on most investors’ buy lists seems an unproductive exercise, so I’m not even going to try it. But there is a case – a strong case, in fact – to be made that another semiconductor stock is worth purchasing right now instead of Nvidia stock.
Image source: Getty Images.
While Nvidia has name recognition even among those who don’t closely follow the tech industry, ASML (NASDAQ: ASML) is a business that semiconductor-focused investors should get to know better. Just as Nvidia is a stalwart among companies that develop semiconductor architectures, ASML is a leader in providing the equipment, software, and services that make the large-scale fabrication of microchips possible.
Where ASML stands out from its peers is that it’s the only company that manufactures extreme ultraviolet lithography (EUV) machines. Unlike deep ultraviolet lithography (DUV) machines (of which there are several manufacturers), EUV systems use light at a wavelength of 13.5 nanometers, making the printing of the most complex and essential layers on the world’s most sophisticated microchips possible. ASML acknowledges that the EUV systems “simplify our customers’ manufacturing processes, compared to complex multiple patterning strategies using DUV immersion systems.”
To lay claim to being the *only *manufacturer of equipment that is vital to advanced semiconductor fabrication is impressive, and it significantly distinguishes ASML from other companies that also provide hardware and services for the semiconductor industry.
There’s no denying that Nvidia spins off boatloads of cash. Thanks to the incredible growth of AI, Nvidia has seen its free cash flow soar from $26.9 billion in fiscal 2024 to $60.7 billion in fiscal 2025. ASML, too, has recognized impressive free cash flow growth. After generating free cash flow of 3.2 billion euros in 2023, ASML reported free cash flow of 9.1 billion euros in 2024.
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