Buffett Brain · Research note
Score updated 19 Oct 2026 · analysis from 1 Jun 2026
ASML· Technology
ASML
ASML owns the one machine the world cannot make chips without, yet at 53 times earnings the price assumes nothing ever goes wrong.
Buffett fit
Strong fit
Owner
93
Durability
94
Management
66
Price
0
Score updated 19 Oct 2026 · analysis from 1 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Technology stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If you buy ASML you are buying a toll booth on the entire advanced semiconductor industry, and that is the kind of business an owner dreams about.
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The durability score of 94 is earned. ASML's monopoly on EUV is protected by decades of accumulated know-how, a 40% five-year , and customers who cannot switch.
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Management runs the balance sheet conservatively, with debt at just 0.13 times equity and net cash on hand, so net debt sits below zero against EBITDA.
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Here is where I put my hands in my pockets. At 53.5 times earnings and an enterprise value of 47 times operating profit, the owner-earnings yield is just 2.0% and the earnings yield 1.9%, less than you would earn sitting in a Treasury bill with none of the cyclical risk.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
7- 1A true monopoly on EUV lithography, reflected in a score of 93 and that lets it earn a 52.6% .
- 2Returns on invested capital of 35% this year and a 40% five-year average, far above the cost of capital and rare for any industrial business.
- 3 of 34.8%, which shows the flows straight to the bottom line.
- 4Fortress balance sheet with of just 0.13 and net cash, so net debt to EBITDA is negative at -0.4.
Concerns
7- 1Valuation is the dominant concern: at a of 53.5 and an owner-earnings yield of just 2.0%, the price leaves no whatsoever and the valuation score is zero.
- 2Enterprise value sits at 47 times operating profit, a price that demands years of perfect execution to justify.
- 3The earnings yield of 1.9% is below a risk-free Treasury, meaning you are paid less than cash to take on real cyclical risk.
- 4Customer concentration is severe: a handful of chipmakers drive orders, and their spending swings hard with the semiconductor cycle.
Price history
$1,561+92.0%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
ASML sells the extreme ultraviolet lithography machines that every leading-edge chipmaker must buy to print the smallest transistors, and no one else on earth makes them. That monopoly shows up in the numbers: a 52.6% , a 34.8% , and returns on invested capital near 35% this year against a five-year average of 40%. Revenue has compounded at 15% a year and earnings at 13%, so this is a wonderful business growing at a healthy clip.
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 23, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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