Seena Hassouna, The Motley Fool
6 min read
Can the company that builds the machines to make chips outpace the company that designs the chips themselves? Here is how to choose between ASML (NASDAQ:ASML) and Nvidia (NASDAQ:NVDA) for your portfolio.
ASML provides the critical lithography equipment used by every major chipmaker to etch tiny circuits onto silicon wafers. Nvidia is the leader in graphics processing units (GPUs) that have become the standard for training massive artificial intelligence models. These two giants are essential to the global tech ecosystem, making them top considerations for any investor.
The case for ASML
ASML sells lithography machines that use light to print circuit patterns on wafers. It has a near-monopoly on Extreme Ultraviolet (EUV) systems, which are necessary for the world’s smallest and most powerful chips. These systems are incredibly complex, often requiring dozens of freight planes to transport a single machine and costing hundreds of millions of dollars each for high-end models.
In the 12 months ended Sept. 30, 2026, revenue reached nearly $43.6 billion, representing growth of roughly 22.5% compared to the prior year. During this same period, the company generated net income of approximately $14.9 billion. Growth was driven by strong demand in both the logic and memory markets as global chipmakers ramped up production for artificial intelligence applications.
As of its December 2025 balance sheet, the debt-to-equity ratio was roughly 0.2x, which compares total debt to the value of assets owned by stockholders. The current ratio was close to 1.3x, showing the company can cover its short-term bills with current assets. In the fiscal year ended Dec. 31, 2025, free cash flow reached nearly $12.3 billion, a key metric for semiconductor stocks.
The case for Nvidia
Nvidia provides GPUs and networking software that form the backbone of modern data centers. In its latest annual report, the company disclosed that two direct customers accounted for nearly 22% and 14% of total revenue. Customer concentration like this adds a layer of risk to the business, though its infrastructure is also used by major cloud providers and partners like Microsoft (NASDAQ:MSFT).
In the 12 months ended July 26, 2026, revenue reached nearly $303.0 billion, which was an increase of approximately 83.4% over the preceding year. Net income for this period was close to $192.9 billion. This massive revenue jump underscores how critical its chips have become for every sector trying to integrate generative AI and accelerated computing.
