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AMAT vs. ASML: Which Semiconductor Equipment Stock is a Better Buy?
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Key Takeaways
AMAT is seeing strong growth in HBM and NAND equipment, with new tools like Kinex.
ASML is shifting from DUV to EUV lithography, with High-NA systems driving long-term growth prospects.
AMAT is viewed as the safer bet as ASML expects weaker DUV demand and lower China revenues in 2026.
Applied Materials (AMAT - Free Report) and ASML Holding (ASML - Free Report) are two key players in the semiconductor equipment market serving the chip manufacturers with widely different manufacturing systems. While ASML Holding specializes in lithography-based chip patterning, Applied Materials provides materials engineering-based layer modification tools.
Both AMAT and ASML have become crucial to AI-chip makers, bringing investors’ attention to their business models, risk profiles and long-term outlook. Let’s break down how each company is performing and which one looks like the better investment right now.
The Case for AMAT Stock
Applied Materials is a major manufacturer of semiconductor fabrication equipment, covering deposition, etching and inspection, serving the most crucial stages of chip manufacturing. AMAT expects its leading-edge foundry, logic, DRAM and high-bandwidth memory (HBM) to be the fastest-growing wafer fabrication equipment businesses in 2026.
AMAT specializes in Gate-All-Around transistors at 2nm and below, Backside power delivery, Advanced wiring and interconnect, HBM stacking and hybrid bonding and 3D device metrology, which are indispensable for manufacturing next-generation semiconductor chips.
AMAT’s HBM business revenues hit $1.5 billion in fiscal 2025. The company is determined to reach $3 billion in the next few years. AMAT expects future generations of HBM to adopt hybrid bonding, and in the hybrid bonding space, AMAT is one of the leading innovators with its first integrated die-to-wafer hybrid bonder, Kinex.
AMAT’s flash memory or NAND sales nearly doubled to $1.41 billion in fiscal 2025 from the year-ago figure of $747.4 million. Although AMAT has a lower market share in the NAND space, it is gaining prominence. The growth in the NAND business came despite the U.S. export controls on the Chinese market.
Recent launches like Xtera epi, Kinex hybrid bonding, PROVision 10 eBeam will add to AMAT’s growth story throughout 2026 and beyond. The Zacks Consensus Estimate for AMAT’s fiscal 2026 and 2027 revenues suggests growth of 2.3% and 11.5%, respectively. The Zacks Consensus Estimate for AMAT’s fiscal 2026 and 2027 earnings suggests growth of 1.6% and 19.5%, respectively. The estimates for fiscal 2026 and 2027 have been revised upward in the past seven days.
Image Source: Zacks Investment Research
The Case for ASML Stock
ASML, being the leading manufacturer of semiconductor lithography tools, is at the center of a major shift in advanced chip manufacturing. Global semiconductor chip manufacturers are now increasingly demanding extreme ultraviolet (EUV) lithography layers in both logic and DRAM manufacturing.
ASML is in the middle of a shift that is taking place in the advanced chip manufacturing space, as companies move from complex multi-patterning with deep ultraviolet (DUV) toward single-exposure EUV for simplifying production, improving yield, lowering process complexity, and supporting advanced scaling
Although this means that ASML’s DUV business will be down throughout 2026, its EUV business is expected to grow rapidly. This will especially be true in the case of ASML’s Low Numerical Aperture EUV and High Numerical Aperture (High-NA) EUV products, as ASML holds a near-monopoly in EUV technology crucial for the world’s most advanced chips at 3nm and below.
ASML’s venture into sub-2nm production with High-NA EUV systems is the next technological leap for chipmakers. This technology will provide ASML with long-term potential as the industry moves toward denser and more efficient chips. ASML’s High-NA machines will be central to that shift throughout 2026.
In the third quarter of 2025, ASML’s management mentioned that the uncertainties related to ongoing trade tensions, policy unpredictability, and geopolitical developments have reduced, making its customers more confident in long-term commitments, positively impacting 2026 revenues. However, ASML also expects its China revenues to normalize and hence decline in 2026. The Zacks Consensus Estimate for ASML’s 2026 revenues and earnings indicates growth of modest 4% and 5%, respectively. Earnings estimates have been revised upward in the past seven days.
Image Source: Zacks Investment Research
AMAT vs. ASML: Price Performance & Valuation Check
AMAT shares have risen 69.5% in the past year, while ASML has soared 78.1%.
12-Month Performance Chart
Image Source: Zacks Investment Research
On the valuation front, Applied Materials trades at a forward 12-month price-to-earnings (P/E) ratio of 32.76, higher than the median of 18.71. ASML trades at a forward P/E multiple of 43.57, higher than its median of 27.83.
Forward 12-Month (P/E) Valuation Chart
Image Source: Zacks Investment Research
Conclusion: AMAT vs. ASML
Both AMAT and ASML play critical roles in chip manufacturing, with the former being a leader in materials engineering-based layer modification tools and the latter specializing in lithography-based chip patterning.
AMAT expects its leading-edge foundry, logic, DRAM and HBM to be the fastest-growing wafer fabrication equipment businesses in 2026. ASML is experiencing increasing demand for its EUV lithography systems in both logic and DRAM manufacturing.
Although AMAT and ASML stocks both carry a Zacks Rank #2 (Buy) at present, the decline in ASML’s China and allied DUV revenues makes AMAT a stronger investment choice among the two.
Image: Bigstock
AMAT vs. ASML: Which Semiconductor Equipment Stock is a Better Buy?
Key Takeaways
Applied Materials (AMAT - Free Report) and ASML Holding (ASML - Free Report) are two key players in the semiconductor equipment market serving the chip manufacturers with widely different manufacturing systems. While ASML Holding specializes in lithography-based chip patterning, Applied Materials provides materials engineering-based layer modification tools.
Both AMAT and ASML have become crucial to AI-chip makers, bringing investors’ attention to their business models, risk profiles and long-term outlook. Let’s break down how each company is performing and which one looks like the better investment right now.
The Case for AMAT Stock
Applied Materials is a major manufacturer of semiconductor fabrication equipment, covering deposition, etching and inspection, serving the most crucial stages of chip manufacturing. AMAT expects its leading-edge foundry, logic, DRAM and high-bandwidth memory (HBM) to be the fastest-growing wafer fabrication equipment businesses in 2026.
AMAT specializes in Gate-All-Around transistors at 2nm and below, Backside power delivery, Advanced wiring and interconnect, HBM stacking and hybrid bonding and 3D device metrology, which are indispensable for manufacturing next-generation semiconductor chips.
AMAT’s HBM business revenues hit $1.5 billion in fiscal 2025. The company is determined to reach $3 billion in the next few years. AMAT expects future generations of HBM to adopt hybrid bonding, and in the hybrid bonding space, AMAT is one of the leading innovators with its first integrated die-to-wafer hybrid bonder, Kinex.
AMAT’s flash memory or NAND sales nearly doubled to $1.41 billion in fiscal 2025 from the year-ago figure of $747.4 million. Although AMAT has a lower market share in the NAND space, it is gaining prominence. The growth in the NAND business came despite the U.S. export controls on the Chinese market.
Recent launches like Xtera epi, Kinex hybrid bonding, PROVision 10 eBeam will add to AMAT’s growth story throughout 2026 and beyond. The Zacks Consensus Estimate for AMAT’s fiscal 2026 and 2027 revenues suggests growth of 2.3% and 11.5%, respectively. The Zacks Consensus Estimate for AMAT’s fiscal 2026 and 2027 earnings suggests growth of 1.6% and 19.5%, respectively. The estimates for fiscal 2026 and 2027 have been revised upward in the past seven days.
Image Source: Zacks Investment Research
The Case for ASML Stock
ASML, being the leading manufacturer of semiconductor lithography tools, is at the center of a major shift in advanced chip manufacturing. Global semiconductor chip manufacturers are now increasingly demanding extreme ultraviolet (EUV) lithography layers in both logic and DRAM manufacturing.
ASML is in the middle of a shift that is taking place in the advanced chip manufacturing space, as companies move from complex multi-patterning with deep ultraviolet (DUV) toward single-exposure EUV for simplifying production, improving yield, lowering process complexity, and supporting advanced scaling
Although this means that ASML’s DUV business will be down throughout 2026, its EUV business is expected to grow rapidly. This will especially be true in the case of ASML’s Low Numerical Aperture EUV and High Numerical Aperture (High-NA) EUV products, as ASML holds a near-monopoly in EUV technology crucial for the world’s most advanced chips at 3nm and below.
ASML’s venture into sub-2nm production with High-NA EUV systems is the next technological leap for chipmakers. This technology will provide ASML with long-term potential as the industry moves toward denser and more efficient chips. ASML’s High-NA machines will be central to that shift throughout 2026.
In the third quarter of 2025, ASML’s management mentioned that the uncertainties related to ongoing trade tensions, policy unpredictability, and geopolitical developments have reduced, making its customers more confident in long-term commitments, positively impacting 2026 revenues. However, ASML also expects its China revenues to normalize and hence decline in 2026. The Zacks Consensus Estimate for ASML’s 2026 revenues and earnings indicates growth of modest 4% and 5%, respectively. Earnings estimates have been revised upward in the past seven days.
Image Source: Zacks Investment Research
AMAT vs. ASML: Price Performance & Valuation Check
AMAT shares have risen 69.5% in the past year, while ASML has soared 78.1%.
12-Month Performance Chart
Image Source: Zacks Investment Research
On the valuation front, Applied Materials trades at a forward 12-month price-to-earnings (P/E) ratio of 32.76, higher than the median of 18.71. ASML trades at a forward P/E multiple of 43.57, higher than its median of 27.83.
Forward 12-Month (P/E) Valuation Chart
Image Source: Zacks Investment Research
Conclusion: AMAT vs. ASML
Both AMAT and ASML play critical roles in chip manufacturing, with the former being a leader in materials engineering-based layer modification tools and the latter specializing in lithography-based chip patterning.
AMAT expects its leading-edge foundry, logic, DRAM and HBM to be the fastest-growing wafer fabrication equipment businesses in 2026. ASML is experiencing increasing demand for its EUV lithography systems in both logic and DRAM manufacturing.
Although AMAT and ASML stocks both carry a Zacks Rank #2 (Buy) at present, the decline in ASML’s China and allied DUV revenues makes AMAT a stronger investment choice among the two.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.