Wall Street Is Fixated on 4.2% Inflation: Here Is the 1 Unstoppable AI Kingpin I Keep Accumulating on Repeat

I keep buying ASML (NASDAQ:ASML | ASML Price Prediction), and every time Wall Street has a fresh panic attack about 4.2% inflation, I find another reason to hit the button again. The macro crowd is staring at the wrong screen. I am staring at a Dutch lithography company that generates substantial cash because it builds the machines that make the chips the AI economy cannot live without.

This is the only company on earth that builds the EUV machines required for leading-edge logic and memory. 100% of EUV flows through one door, and that door is in Veldhoven. When logic customers made up 69% of Q3 2025 net system sales and 84% of bookings, the message was simple: every hyperscaler chasing the next training cluster is funneling capex into foundries that cannot produce without ASML.

The Data Behind the Repeat Purchases

ASML closed FY 2025 with $37.94 billion in revenue, up 15.58% year over year, and net income of $11.16 billion, up 26.91%. EUV systems revenue alone reached $13.47 billion, a 39% jump. The order book told the same story: Q4 2025 bookings hit a record $15.28 billion, and the year-end backlog stood at $45.06 billion. That is more than a year of guided revenue sitting in contracted demand before a single new customer call.

Then came Q1 2026, where management raised the bar again. Revenue came in at $10.34 billion with EPS of $8.43 and a 53.0% gross margin at the high end of guidance. CEO Christophe Fouquet said “Demand for chips is outpacing supply. In response, our customers are accelerating their capacity expansion plans for 2026 and beyond”. Full-year 2026 guidance was lifted to €36 to €40 billion, and the 2030 opportunity now sits at $51.91 billion to $70.78 billion in revenue at 56% to 60% gross margin.

The second pillar is the recurring engine. Installed Base Management generated $9.52 billion in FY 2025, up 26%, and Q1 2026 alone delivered $2.93 billion. That is service, upgrades, and field options on machines already bolted to fab floors. The revenue does not care about a CPI reading.

The third pillar is how the board treats owners. The 2025 intended dividend was raised to €7.50 per share, a 17% bump, and a €12 billion buyback runs through December 31, 2028. In Q1 alone, ASML repurchased about 0.9 million shares for roughly €1.1 billion. Cash and equivalents sit at $9.88 billion against shareholders’ equity of $24.57 billion. This balance sheet funds the compounding without diluting me.

The Risk I Have Already Priced In

Export controls are real. China revenue is expected to drop sharply in 2026 versus the strong 2024 and 2025 base, and the political backdrop could tighten further. Management built the 2026 guidance bandwidth specifically to absorb that hit, and the backlog already reflects the redirect of slot capacity toward leading-edge logic customers building for AI. The customers replacing China orders are the same ones queuing for High NA EUV. The thesis holds.

Critics will point at a trailing P/E near 62 and a forward P/E around 51. I point at free cash flow of $12.81 billion, a return on equity of 52.2%, and a monopoly on the one machine the AI buildout cannot route around. As long as the world keeps demanding more transistors per watt, the accumulation thesis stays intact.