Wall Street's Next Blockbuster Stock Split Could Come From This Chip Equipment Giant

ASML Holding (ASML +1.76%) has been one of the biggest beneficiaries of the artificial intelligence (AI) boom, thanks to its role in advanced chipmaking. In its third-quarter earnings announcement on Oct. 14, ASML reported record quarterly sales, with management citing continued strength in AI investments and customer equipment demand. With AI fueling another wave of demand for its equipment, the company's rising stock price could position it to conduct Wall Street's next major stock split.

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Why ASML's AI role makes a stock split plausible

ASML holds one of the most important positions in the AI supply chain. It's the world's only commercial supplier of extreme ultraviolet (EUV) lithography machines, which are necessary to manufacture all of the most advanced semiconductors.

Its customers include chip industry heavyweights like Taiwan Semiconductor Manufacturing, Samsung, and Intel.

On top of that, ASML isn't a stranger to stock splits. It completed three during its earlier years: a 2-for-1 split in 1997, another 2-for-1 split in 1998, and a 3-for-1 split in 2000.

But it's been a while since ASML's last split, suggesting another one could be long overdue as its growth accelerates and pushes its share price higher.

When it comes to growth, ASML's management said that its current supply plans for 2027 and 2028 would not be sufficient to meet expected customer demand. In light of that, some customers are already expressing interest in placing orders for equipment deliveries as far out as 2029 and 2030.

And that brings us to another potentially important growth driver: ASML's newest generation of extreme ultraviolet lithography technology.

Its next-generation machines could extend its competitive advantages

ASML's existing EUV technology is already nearly impossible for competitors to replicate -- if rivals do, it won't happen for years. However, the company isn't standing still. Specifically, it has developed High Numerical Aperture (High NA) EUV lithography equipment, which can print even smaller transistors and features, and thus fabricate more component-dense and powerful chips.

And one of the most encouraging developments is that High NA EUV technology is moving beyond experimentation.

For example, early adopter Intel has already processed more than 1 million wafers using the technology across equipment qualification, research and development (R&D), and production applications.

Meanwhile, other manufacturers are moving toward adoption.

For instance, Samsung Electronics and SK Hynix have outlined plans to introduce High NA EUV technology into their memory production beginning in 2028, while TSMC, the world's largest third-party chip foundry by far, intends to use it in high-volume manufacturing of advanced chips starting in 2030.

That matters because the future of ASML's next-generation technology doesn't depend on a single customer or application. Some of the world's biggest semiconductor manufacturers are already preparing to integrate it into their long-term production plans.

But despite its competitive advantages and technological monopoly, ASML still faces risks. For one, the chipmaking industry it supports is cyclical. If AI spending slows, chipmakers could delay their foundry expansion plans, potentially reducing demand for expensive EUV lithography equipment.

Plus, geopolitical restrictions and export controls, especially those that currently block the sales of advanced semiconductor manufacturing equipment to customers in China, are ongoing headwinds to its sales growth. In addition, the company's reliance on highly specialized supply chains complicates production of its machines.

Regardless, given ASML's dominant position in chipmaking technology and the AI boom providing a strong growth catalyst, there are plenty of reasons why its stock belongs on retail investors' radars.

Could ASML be considering a stock split?

Analysts on Wall Street remain optimistic about ASML stock. In fact, the vast majority of analysts covering it rate it a buy or strong buy, with an average 12-month price target of over $2,100.

Meanwhile, the stock trades at around $1,550 per share and at a forward price-to-earnings (P/E) ratio of about 23, which looks like a reasonable valuation, especially considering its competitive moat and long-term AI growth opportunities. That could leave room for further upside if earnings growth beats expectations.

Overall, ASML has a lot going for it, from its role in advanced chipmaking to the growing demand for AI infrastructure. If its growth continues to accelerate and pushes the stock higher, its first stock split in decades could be on the table, too.

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