The S&P 500 (SNPINDEX: ^GSPC) fell by 4.6% in the first three months of 2026, and had dipped by more than 9% from its peak late in that period. Yet a little over two weeks into April, the S&P 500 hasn’t just made up those losses, it’s setting new all-time highs again.
Here’s why semiconductor equipment manufacturer ASML (NASDAQ: ASML) is a top growth stock to buy now.
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ASML crushed both the S&P 500 and the tech sector in 2025. So far this year, it has followed up that incredible performance with a 32.6% gain, outpacing semiconductor manufacturing giant Taiwan Semiconductor Manufacturing, Broadcom, every “Magnificent Seven” stock, and the major indexes.
ASML and the broader semiconductor industry are on the rise because demand for artificial intelligence (AI) chips continues to outpace what fabrication plants can currently produce — creating multiyear backlogs.
Investors are becoming increasingly convinced that the spike in AI chip demand won’t be a short-lived phenomenon, but rather a trend with staying power. A permanent increase in demand, even with ebbs and flows driven by spending cycles, would be incredible news for ASML given its unique role in the value chain.
ASML is a catch-all way to invest in AI because it benefits from data center spending regardless of which hyperscaler is operating the data center, what AI chips and networking infrastructure go into the data center, who is powering it, or what specialized machinery is in it.
This is because ASML has a virtual monopoly on high-end semiconductor lithography equipment. These massive and expensive machines are basically highly advanced printers that print tiny transistors and wires into computer chips. The most advanced ones bounce light off multilayered mirrors inside a vacuum chamber, enabling interconnected layering on microchips. ASML spent many years and billions of euros figuring out how to do this at higher resolutions and transistor densities than any rival has yet been able to achieve. Put simply, today’s most advanced chips depend on a highly advanced manufacturing process that wouldn’t be possible without ASML’s systems.
It is music to ASML’s ears that companies are racing to design and build their own custom chips to reduce their dependence on Nvidia‘s graphics processing units. ASML loves it when Advanced Micro Devices and Broadcom challenge Nvidia’s market leadership. Tesla entered a partnership with Intel to build a fab in Texas for advanced AI chips for data centers, robotics, and vehicles. The U.S. build-out of chip fabs will be yet another long-term catalyst for ASML, as it could reduce the equipment maker’s reliance on customers such as Taiwan Semiconductor and Samsung Electronics.
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