In the rapidly evolving semiconductor industry, ASML Holding N.V. and KLA Corporation stand out as key players, each contributing to the advancement of chip technology. ASML specializes in cutting-edge lithography systems, while KLA focuses on process control and yield management solutions. Both companies target similar markets, yet their innovative strategies differ significantly. This analysis will help you determine which of these two giants presents the most compelling investment opportunity.
Table of contents
Company Overview
ASML Overview
ASML Holding N.V. is a key player in the semiconductor industry, specializing in the development and manufacturing of advanced lithography systems. The company is renowned for its cutting-edge technology, particularly its extreme ultraviolet (EUV) lithography systems, which are essential for producing smaller and more powerful chips. Founded in 1984 and headquartered in Veldhoven, the Netherlands, ASML has established a dominant market position, serving major chipmakers globally. With a market capitalization of approximately $411B, ASML continues to lead in innovation, providing vital tools for the ever-evolving semiconductor landscape.
KLA Overview
KLA Corporation, incorporated in 1975 and based in Milpitas, California, is a prominent provider of process control and yield management solutions for the semiconductor and electronics industries. The company operates through various segments, offering a comprehensive range of products including wafer inspection systems, defect management, and metrology solutions. With a market cap nearing $154B, KLA’s technology plays a crucial role in enhancing manufacturing efficiency and product quality. As the demand for advanced electronic devices grows, KLA’s strategic focus on innovation positions it well within the competitive semiconductor sector.
Key similarities and differences
Both ASML and KLA operate within the semiconductor industry and provide essential technologies for chip manufacturing. However, ASML primarily specializes in lithography systems, whereas KLA focuses on process control and yield management solutions. This distinction highlights their complementary roles in the semiconductor supply chain, catering to different aspects of chip production.
Income Statement Comparison
Below is a comparison of the most recent income statements for ASML Holding N.V. and KLA Corporation, providing insights into their financial performance.
| Metric | ASML | KLA |
|---|---|---|
| Market Cap | 410.83B | 154.45B |
| Revenue | 28.26B | 12.16B |
| EBITDA | 10.12B | 5.34B |
| EBIT | 9.21B | 4.95B |
| Net Income | 7.57B | 4.06B |
| EPS | 19.25 | 30.53 |
| Fiscal Year | 2024 | 2025 |
Interpretation of Income Statement
In the latest fiscal year, ASML showed a revenue increase to 28.26B, reflecting strong demand in the semiconductor sector, while KLA’s revenue also grew to 12.16B, though at a slower pace. ASML’s net income reached 7.57B, demonstrating solid profitability, whereas KLA reported a net income of 4.06B. Both companies maintained healthy EBITDA margins, with ASML achieving 35.8% and KLA at 44.0%. Overall, ASML’s growth trajectory appears robust, while KLA’s performance indicates stabilization with incremental growth. Careful consideration of these trends is essential for informed investment decisions.
Financial Ratios Comparison
In the following table, I present a comparative analysis of key financial ratios for ASML Holding N.V. and KLA Corporation to help you make informed investment decisions.
| Metric | ASML (2024) | KLAC (2025) |
|---|---|---|
| ROE | 41% | 87% |
| ROIC | 25% | 38% |
| P/E | 35 | 29 |
| P/B | 14 | 25 |
| Current Ratio | 1.53 | 2.62 |
| Quick Ratio | 0.95 | 1.83 |
| D/E | 0.27 | 1.30 |
| Debt-to-Assets | 10% | 38% |
| Interest Coverage | 56 | 17 |
| Asset Turnover | 0.58 | 0.76 |
| Fixed Asset Turnover | 3.91 | 9.70 |
| Payout ratio | 33% | 22% |
| Dividend yield | 0.97% | 0.76% |
Interpretation of Financial Ratios
ASML exhibits strong return metrics (ROE and ROIC) compared to KLA, indicating effective management of equity and capital. While ASML’s debt levels are lower, KLA demonstrates higher asset turnover and operational efficiency. However, its significantly higher debt-to-equity ratio raises concerns regarding financial leverage. Both companies maintain healthy liquidity, but ASML’s interest coverage suggests less risk in servicing debt. Overall, both companies have their strengths and weaknesses, warranting careful consideration based on your investment strategy.
Dividend and Shareholder Returns
ASML Holding N.V. maintains a healthy dividend policy, with a payout ratio of 33.8% and a dividend yield of approximately 0.97%. This suggests a commitment to returning value to shareholders while still investing in growth. KLA Corporation also pays dividends, with a payout ratio of 22.3% and a yield of about 0.76%. Both companies engage in share buybacks, which further enhances shareholder value. Overall, their distributions appear sustainable and supportive of long-term value creation.
Strategic Positioning
ASML Holding N.V. and KLA Corporation are leading players in the semiconductor industry, with ASML commanding a significant market share due to its advanced lithography systems essential for chip production. KLA, with its strong focus on yield management and process control solutions, faces competitive pressure but maintains a robust position through innovation. Both companies must navigate technological disruptions and adapt to evolving market demands to sustain their competitive edge.
Stock Comparison
In this section, I will analyze the weekly stock price movements of ASML Holding N.V. and KLA Corporation over the past year, highlighting significant price changes and trading dynamics.
Trend Analysis
ASML Holding N.V. has experienced a remarkable price change of +50.71% over the past year, indicating a bullish trend. The stock has shown notable acceleration in its price movement, with a highest price of 1,085.26 and a lowest price of 605.55. The standard deviation of 126.46 suggests significant volatility. In the recent period from September 14, 2025, to November 30, 2025, the price rose by 30.24%, maintaining an acceleration status with a trend slope of 12.94.
KLA Corporation, similarly, has posted an impressive price change of +115.96% over the past year, also reflecting a bullish trend. The stock’s price has accelerated, with a highest price of 1,208.74 and a lowest price of 544.31. The standard deviation of 148.89 indicates a slightly higher volatility compared to ASML. From September 14, 2025, to November 30, 2025, KLA’s stock rose by 21.93%, supported by a trend slope of 15.73.
Both companies show strong upward momentum, but KLA’s performance stands out with a significantly higher percentage change over the analyzed period.
Analyst Opinions
Recent analyst recommendations for ASML Holding N.V. (ASML) show a consensus rating of B+, indicating a strong buy stance. Analysts highlight its robust return on equity (5) and assets (5) as key strengths. In contrast, KLA Corporation (KLAC) holds a B rating, suggesting a hold position, with solid scores in return metrics but a lower debt-to-equity score (1). Analysts advise caution with KLAC, recommending monitoring market trends closely. Overall, the consensus leans towards buying ASML while holding KLAC.
Stock Grades
In reviewing the latest stock grades for ASML Holding N.V. and KLA Corporation, we find consistent evaluations from reputable grading companies.
ASML Holding N.V. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Wells Fargo | maintain | Overweight | 2025-10-16 |
| Susquehanna | maintain | Positive | 2025-10-10 |
| JP Morgan | maintain | Overweight | 2025-10-06 |
| UBS | upgrade | Buy | 2025-09-05 |
| Wells Fargo | maintain | Overweight | 2025-07-08 |
| Jefferies | downgrade | Hold | 2025-06-26 |
| Barclays | downgrade | Equal Weight | 2025-06-03 |
| Wells Fargo | maintain | Overweight | 2025-04-17 |
| Susquehanna | maintain | Positive | 2025-04-17 |
| Raymond James | maintain | Strong Buy | 2025-04-16 |
KLA Corporation Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Citigroup | maintain | Buy | 2025-10-31 |
| Goldman Sachs | maintain | Neutral | 2025-10-30 |
| TD Cowen | maintain | Hold | 2025-10-30 |
| Needham | maintain | Buy | 2025-10-30 |
| UBS | maintain | Neutral | 2025-10-30 |
| Wells Fargo | maintain | Equal Weight | 2025-10-30 |
| JP Morgan | maintain | Overweight | 2025-10-30 |
| Cantor Fitzgerald | maintain | Neutral | 2025-10-30 |
| Barclays | maintain | Overweight | 2025-10-30 |
| Evercore ISI Group | maintain | Outperform | 2025-10-30 |
Overall, the trend indicates a solid confidence in ASML, with multiple maintain ratings at Overweight and upgrades to Buy. KLA shows a mix of ratings that reflect a stable outlook, with several maintains at Buy and Overweight, suggesting it remains a favorable choice among analysts.
Target Prices
The latest consensus target prices from analysts for ASML Holding N.V. and KLA Corporation indicate optimistic expectations for both companies.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| ASML Holding N.V. | 1200 | 800 | 1045 |
| KLA Corporation | 1400 | 1154 | 1286.29 |
For ASML, the consensus target price of 1045 is slightly below the current market price of 1059.92, suggesting potential for mild gains. KLA’s target consensus of 1286.29 is also above its current price of 1175.47, indicating favorable expectations from analysts.
Strengths and Weaknesses
The following table outlines the key strengths and weaknesses of ASML Holding N.V. and KLA Corporation, two significant players in the semiconductor industry.
| Criterion | ASML Holding N.V. | KLA Corporation |
|---|---|---|
| Diversification | High | Moderate |
| Profitability | Strong (28.4% net margin) | Strong (33.4% net margin) |
| Innovation | Leading in EUV tech | Broad range of solutions |
| Global presence | Extensive (operates in multiple regions) | Extensive (global market) |
| Market Share | Leading in lithography | Strong in inspection |
| Debt level | Low (10.3% debt-to-assets) | High (37.9% debt-to-assets) |
Key takeaways highlight that both companies exhibit strong profitability and global presence; however, ASML leads in innovation and maintains a lower debt level, which may appeal to risk-averse investors.
Risk Analysis
The following table summarizes the key risks associated with ASML Holding N.V. and KLA Corporation as of the most recent fiscal year.
| Metric | ASML | KLA |
|---|---|---|
| Market Risk | High (Beta: 1.355) | Moderate (Beta: 1.433) |
| Regulatory Risk | Moderate | High |
| Operational Risk | Low | Moderate |
| Environmental Risk | Moderate | High |
| Geopolitical Risk | High | Moderate |
In summary, both companies face significant market and regulatory risks, particularly due to the semiconductor industry’s volatile nature and geopolitical tensions. For instance, ASML’s reliance on international markets makes it vulnerable to trade restrictions.
Which one to choose?
In comparing ASML Holding N.V. (ASML) and KLA Corporation (KLAC), both companies show strong fundamentals. ASML has a gross profit margin of 51.3% with a net profit margin of 26.8%, while KLAC displays a higher gross profit margin of 62.3% and a net profit margin of 33.4%. Despite ASML’s higher market cap of €263B compared to KLAC’s $119B, KLAC has demonstrated a more robust recent price change of 115.96% compared to ASML’s 50.71%. Analyst ratings favor ASML with a grade of B+ versus KLAC’s B. If you prioritize growth, KLAC appears favorable, while ASML may suit those seeking stability and innovation in semiconductor technology. However, both companies face risks from supply chain issues and market competition.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of ASML Holding N.V. and KLA Corporation to enhance your investment decisions:
