We recently published a list of Top 10 Semiconductor Stocks to Buy Now. In this article, we are going to take a look at where ASML Holding N.V (NASDAQ:ASML) stands against other top semiconductor stocks to buy now.

The global semiconductor industry reported a collective revenue of $626 billion in 2024, an 18.1% increase YoY, as per Gartner. Data centers accounted for the second largest sector for semiconductors, behind Smartphones, with revenues in this sector nearly doubling from $64.8 billion in 2023 to $112 billion in 2024. The International Data Corporation estimated that global demand for semiconductors will grow by 15% in 2025.

The U.S. semiconductor sector is a critical component of the global technology landscape, and its performance has significant implications for the broader economy. In recent years, the industry has experienced both growth and challenges, shaped by several factors. According to analysts, the growth is driven by the increasing reliance on technology in various sectors, including consumer electronics, automotive, healthcare, and artificial intelligence.

The industry has been at the forefront of technological innovation, with companies investing heavily in research and development. This has led to the development of more advanced chips, such as those using smaller process nodes and new materials, enabling greater performance and efficiency. The rapid pace of technological innovation continues to drive demand for more advanced semiconductors. As mentioned earlier, the rise of artificial intelligence (AI) and other emerging technologies is particularly important as these applications require high-performance chips that US companies are well-positioned to provide.

The semiconductor industry is highly competitive, with companies from other countries, particularly in Asia, posing a significant challenge to U.S. companies. This competitive environment has led to increased pressure on pricing and a further need for innovation to maintain a competitive edge. The industry is increasingly affected by geopolitical tensions, particularly between the U.S. and China. The ongoing trade tensions between the US and China have created uncertainty and challenges for the semiconductor industry. These tensions have led to restrictions on trade and investment, which can disrupt supply chains and limit market access for US companies. However, they have also spurred efforts to diversify supply chains and increase domestic production, which could benefit the US semiconductor sector in the long run.

The U.S. government has recognized the strategic importance of the semiconductor industry and has taken steps to support its growth. The CHIPS and Science Act of 2022, which provides significant funding for domestic semiconductor manufacturing and research, is a prime example of this support.

The overall health of the global economy also plays a role in the performance of the semiconductor sector. Economic downturns can lead to decreased demand for electronic devices, which in turn reduces demand for semiconductors. Conversely, periods of economic growth can boost demand for semiconductors and create opportunities for US companies. With the election of President Donald Trump into the Oval Office, analysts are confident that the tech sector will continue to show improved performance.

Our Methodology

For this list, we identified the 10 semiconductor stocks which have the highest upside potential using 12-month consensus price target. Then we merged these stocks with Insider Monkey’s Q4 2024 proprietary hedge fund holdings database and identified the 10 most popular hedge fund semiconductor stocks. The stocks are ranked in ascending order of their hedge fund positions.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

ASML Holding N.V. (NASDAQ:ASML)

No. Of Hedge Fund Holders: 86

ASML Holding N.V (NASDAQ:ASML) develops, produces, and services advanced semiconductor lithography equipment for chipmakers. The company’s stock price fell 10% to $683 following the DeepSeek news, potentially creating a buying opportunity for long-term investors. A deeper look into its financials reveals strong Q4 2024 results. Net sales of €9.3 billion exceeding guidance, driven by both EUV and non-EUV systems. Looking ahead to 2025, ASML projects revenue between €30B and €35B with gross margins of 51% to 53%. Logic sales meanwhile declined by 17% to €13.2B in 2024, and memory sales saw a significant 44% increase to €8.6B, demonstrating market volatility.

CEO Christophe Fouquet reiterated that the news of DeepSeek would not interrupt chip equipment manufacturers, stating:

“So, basically, the AI-driven chips are more demanding when it comes to advanced process. I think what we said is we see those, those new products mostly calling for a bit of an acceleration of Moore’s Law and therefore our customers being more aggressive when it comes to technology transition. If AI demand continues to be strong and customers are successful in bringing on additional capacity online to support that demand, there is potential opportunity towards the upper end of our range.”

ASML Holding N.V (NASDAQ:ASML) order backlog remains strong at approximately €36 billion, though less transparent reporting starting in 2026 could lead to increased stock price volatility. In essence, the company’s leadership in advanced chip manufacturing and strong technological advantage position it well for long-term growth. Looking ahead, the company shared future estimates of top-line for CY25 to be between €30B-€35B. Caution must be observed by investors of both cyclical fluctuations and geo-political uncertainties that could impact the company. The consensus average price over the next twelve trading months is $918.5 with an upside of 25.45%.

Overall, ASML ranks 7th on our list of top semiconductor stocks to buy now. While we acknowledge the potential for ASML as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that delivers higher returns than ASML, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires

Disclosure: None. This article is originally published at Insider Monkey.