ASML’s Narrowest Valuation Gap Since 2014 Highlights AMAT Appeal
AMAT•ASML shares climbed 64% this year yet trade at a 25% forward P/E premium to Applied Materials, the smallest gap since 2014, highlighting AMAT’s valuation appeal. A forecast for 90 EUV machines in 2027 versus 48 in 2025 signals robust semiconductor capex that could boost Applied Materials’ equipment sales.
1. Relative Valuation Gap
ASML currently trades at a roughly 25% forward P/E premium to Applied Materials, the smallest relative gap since 2014. This compressed valuation differential underscores investor interest in AMAT as a lower-cost way to play surging semiconductor capital spending.
2. EUV Machine Sales Forecast
Bank of America projects ASML will sell 90 EUV lithography machines in 2027, nearly double the 48 units sold last year. This anticipated ramp reflects strong memory and logic chip investment that drives demand for advanced production tools.
3. Implications for Applied Materials
Rising semiconductor capex on deposition, etching, chemical processing and advanced packaging could funnel greater spending to Applied Materials’ tool portfolio. A sustained AI-led spending boom may therefore improve AMAT’s revenue growth and justify a higher valuation.
