I have a +156% profit on ASML. I sold one share and am holding the rest. Why? $ASML
One of the hardest things in investing isn't buying a quality company.
It's holding on when the position is sitting on a huge gain, the stock looks expensive, and you're tempted to "take money off the table."
That's exactly the situation I'm facing with ASML right now.
My current position:
5 shares,
average purchase price €642.80,
value approximately €8,200,
unrealized gain approximately +156%,
portfolio weight 10.3%.
I originally held six shares. I sold one and took some profits off the table. It was a form of risk management because the position, after huge growth, was starting to make up too large a portion of the portfolio.
But I don't want to sell the remaining five shares.
Why am I holding a company that trades at roughly 45–50 times expected earnings?
It's not just another equipment maker
It's often said that no chip could be made without ASML. That's not entirely accurate.
Older and simpler chips can still be manufactured using DUV equipment from Nikon or Canon.
The more accurate statement is that, without ASML, it's currently impossible to economically produce the most advanced logic and DRAM chips in high volume.
ASML is the only company in the world capable of mass-producing EUV lithography systems. Companies like TSMC, Samsung, Intel, and SK Hynix need these to manufacture the most advanced processors, AI accelerators, and memory chips.
It's not a monopoly built on a single patent.
It's the result of decades of development, an immense amount of know-how, a specialized supply chain, unique optics from Carl Zeiss, proprietary light-source technology, software, metrology, and service infrastructure.
Even if someone built a working prototype of a competing EUV machine, they'd still have to achieve comparable productivity, reliability, and yield in high-volume manufacturing.
That's the difference between a prototype and real competition.
Results showed that demand is still accelerating
In the second quarter of 2026, ASML achieved:
revenue of €9.33 billion – approximately 21% year-over-year growth,
net profit of €2.92 billion – approximately 27% growth,
EPS of €7.59 – approximately 29% growth,
gross margin of 54%,
operating margin of 37.1%.
Even more important was the outlook.
The company raised its full-year revenue estimate from the original €36–40 billion to €43–45 billion. For the third quarter, it expects revenue of €11–12 billion and a gross margin of 55–57%.
Management described first-half 2026 orders as "extremely strong." Customers are accelerating capacity expansions for advanced logic and memory chip production.
ASML therefore plans to increase production capacity for EUV and DUV immersion systems by approximately 30% in 2027. A similar further increase is being explored for 2028. ASML Q2 2026 results
The company doesn't make a decision like this based on short-term optimism. It requires long-term customer commitments and a fairly high degree of certainty about future demand.
The old 2030 outlook is starting to look outdated
At its 2024 Investor Day, ASML presented a scenario where it could achieve, by 2030:
revenue of €44–60 billion,
gross margin of 56–60%.
However, for 2026, it now expects revenue of €43–45 billion.
That means the low end of the original 2030 outlook will likely be reached four years early.
Management will therefore present a new long-term financial model in June 2027. An upgrade there could be another catalyst for the stock. ASML Investor Day 2024
In my view, the current valuation doesn't just price in today's earnings. The market expects that the original top-end scenario of €60 billion will eventually be pushed even higher.
That's both an opportunity and a risk.
ASML is also making more and more from the machines it has already sold
An important part of the investment thesis is Installed Base Management – service, maintenance, and upgrades for existing equipment.
In the second quarter, this segment generated €2.76 billion in revenue, or almost 30% of total revenue.
Every new machine sold expands the installed base that ASML will service for many years to come. Moreover, the customer doesn't always have to buy a completely new system. ASML can sell them a high-margin upgrade that boosts the performance, precision, or productivity of their existing equipment.
The result is a growing stream of recurring revenue and even higher switching costs for customers.
ASML originally expected Installed Base Management to grow from €6.2 billion in 2024 to €11–13 billion in 2030. The current quarterly run rate is already near the low end of that target.
High-NA is extending the technological lead
The next phase is High-NA EUV.
One tool costs roughly $400 million, but on certain layers, it can replace multiple exposures with a single exposure. This reduces the number of production steps for customers, improves yield, and, in the right applications, delivers significant cost savings.
Intel has already started using High-NA on selected layers of its Panther Lake processors. This is an important confirmation that the technology is gradually moving from development into real high-volume manufacturing. Reuters
If adoption is successful, ASML won't just sell more systems. It will sell technologically more advanced and more expensive equipment with potentially higher value for the customer.
The valuation is high. That shouldn't be ignored
ASML currently trades at roughly 45–50 times expected earnings.
That's definitely not a cheap stock.
Even the best business can be a poor investment if the investor pays too high a price. At the current valuation, the market is expecting continued double-digit EPS growth, further estimate increases, margin expansion, and successful High-NA adoption.
If earnings were to grow only 8–10% per year and the P/E gradually contracted to 30, the stock could stagnate or decline for several years, even though the company itself remains high-quality.
Key risks include:
a slowdown in AI capex,
order push-outs from customers,
further export restrictions to China,
high dependency on a few large chipmakers,
slower High-NA adoption,
increased competition in DUV or the emergence of alternative technologies,
multiple compression.
That's why I don't view ASML as an aggressive buy right now.
I view it as a quality position that I want to keep holding.
Why the current position size suits me
ASML now accounts for roughly 10.3% of my portfolio.
If the stock fell 50%, it would drag the overall portfolio down by about 5.2 percentage points. That would be unpleasant, but not devastating.
If ASML's value were to double over the coming years, the current position would add roughly 10% to the portfolio.
So, by selling one share, I reduced concentration risk while still keeping a large enough position for the company's continued success to meaningfully impact my results.
I don't want to sell another share just because I'm in profit.
Equally, at today's valuation, I don't feel the need to buy aggressively. New contributions can be directed to other companies and let ASML's weight gradually decline through natural portfolio growth.
I would start thinking more seriously about another trim only if the position grew above roughly 15–18% of the portfolio, or if the investment thesis itself started to break down.
Conclusion
I'm not holding ASML because I bought it at €642 and am now up 156%.
I'm holding it because, looking ahead, I still see one of the strongest technological positions in the world.
The company has an EUV monopoly, a growing service base, another product cycle in High-NA, rising margins, and customers that can't manufacture the most advanced chips without its technology.
The valuation is high, and future returns may not resemble those of recent years. But that doesn't automatically mean you should sell an exceptional business and hope to buy it back cheaper later.
I sold one share, took some profits, and reduced risk.
The remaining five shares I'm letting work.
This is not investment advice. It's my personal investment thinking and a look at my own position.