The Competitive Threat That Never Was: ASML’s Widening Moat Boosts Stock 77% YTD

By Trey Thoelcke Published Jun 12, 6:55AM EDT

Quick Read

ASML stock surged 77% year-to-date and 142% over the trailing year after Q1 2026 revenue hit $10.34 billion with 53% gross margins.
Pat Gelsinger's xLight remains a lab-stage startup targeting first silicon in 2028, while ASML widens its lead with a 1,000-watt EUV source.
ASML's forward P/E of 48 and stock price above the $1,699 analyst consensus suggest most of the upside may already be priced in.
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The Competitive Threat That Never Was: ASML’s Widening Moat Boosts Stock 77% YTD — © 24/7 Wall St.

Roughly six months ago, we asked whether ASML (NASDAQ: ASML | ASML Price Prediction) finally had a real competitor: xLight, the stealth startup chaired by ousted Intel CEO Pat Gelsinger, was developing free-electron-laser light sources backed by up to $150 million in CHIPS Act funding with the U.S. government taking an equity stake, targeting first silicon wafers by 2028. Half a year on, the threat has not materialized, and ASML’s moat looks wider.

The Scoreboard: Stock Rallied, Moat Reinforced

The price action tells the story. ASML shares closed at $1,899.48 on June 11, 2026, up 77.2% year to date and 142.3% over the trailing year. That contrasts sharply with the July 2025 panic when CEO Christophe Fouquet warned, “while we still prepare for growth in 2026, we cannot confirm it at this stage.”

Q1 2026 buried that doubt. ASML reported EPS of €7.15 ($8.37 USD) on revenue of €8.8 billion ($10.3 billion USD), with gross margin of 53.0% at the high end of guidance. Management raised full-year 2026 net sales guidance to €36 billion to €40 billion, with bandwidth that “can accommodate potential outcomes of the export control discussions that are currently ongoing.”

Fouquet’s tone shifted decisively: “The semiconductor industry’s growth outlook continues to solidify, driven by ongoing AI-related infrastructure investments. Demand for chips is outpacing supply.” He added that memory customers are “sold out for 2026 and their supply constraint will last beyond 2026.”

The Q4 2025 earnings report set the stage: record full-year revenue of €9.7 billion ($11.6B USD), net income of €2.84 billion ($3.03B USD), Q4 net orders of €13.16 billion ($15.28B USD), and a backlog of €38.80 billion ($45.06B USD). ASML also launched a €12 billion buyback program through December 31, 2028.

Where xLight Actually Stands

xLight remains a private, lab-stage venture targeting first silicon wafers in 2028. Meanwhile, ASML demonstrated a 1,000-watt EUV source, pushed High NA capability that can “reduce the number of process steps from 100 to 10,” and lifted the NXE:3800F roadmap to 260 wafers per hour. The gap between these competitors is widening.

The Real Risks: Valuation and China

The near-term risks center on valuation and China. ASML trades at a trailing P/E of 60 and forward P/E of 48, with the stock above the Wall Street consensus target of $1,699.36. Analyst ratings still skew bullish, but a lot of good news is already reflected in the price.

China exposure is the other overhang. Fouquet said in October that he expected “China customer demand, and therefore our China total net sales in 2026 to decline significantly.”

Verdict

The xLight threat remains a medium-to-long-term concern, while ASML’s monopoly looks intact — possibly stronger. AI capital expenditure is the tailwind investors should keep watching.

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About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.