ASML vs. Intel: Which AI Chip Stock Is a Better Buy in 2026?

As AI reshapes the chip industry in 2026, semiconductor companies are redefining their roles. Choosing between ASML Holding (NASDAQ:ASML) and Intel (NASDAQ:INTC) requires understanding the difference between the industry's essential toolkit and its manufacturing foundation.

ASML provides the complex lithography machines that other companies use to print circuits. Intel designs and builds its own chips while expanding its services to manufacture chips for outside customers. Both are critical to the global supply chain, but they offer very different financial profiles for investors today.

The case for ASML Holding

ASML is a titan among semiconductor stocks because it is the sole provider of extreme ultraviolet lithography machines. These systems are necessary for printing the smallest transistors on leading-edge chips. It serves all major global chipmakers.

In fiscal 2025, revenue reached nearly $37.5 billion, representing growth of approximately 15.6% over the prior year. (ASML reports in euros; figures here are converted to U.S. dollars.) Net income for the period reached roughly $11.0 billion. This indicates a net margin of approximately 29.4%, which is the percentage of revenue remaining after all expenses are paid.

As of its December 2025 balance sheet, the debt-to-equity ratio is 0.1x, meaning total debt is very low relative to shareholder equity. The current ratio is 1.3x, which measures the ability to cover short-term liabilities with current assets. Free cash flow, calculated as cash from operations minus capital expenditures, reached nearly $12.2 billion for the year.

The case for Intel

Intel is a longtime industry leader that is now focusing on its client computing and data center segments while building a foundry business. In August 2025, the company issued a roughly 10% equity stake to the U.S. government in exchange for $8.9 billion of federal funding. Having Washington as a major shareholder ties the business closely to political and domestic manufacturing goals.

In fiscal 2025, revenue was nearly $52.9 billion, a slight decrease of roughly 0.5% year over year. The company reported a net loss of approximately $267.0 million for the period. This resulted in a net margin of negative 0.5%, reflecting the financial pressure of its current business transition.

As of its December 2025 balance sheet, the debt-to-equity ratio is 0.4x, and the current ratio is 2.0x. Free cash flow reached negative $4.9 billion for the fiscal year. Note that stock-based compensation accounted for roughly 25.1% of operating cash flow, inflating reported cash generation, since SBC is a non-cash expense added back in the cash flow statement.

Risk profile comparison

ASML faces risks from geopolitical tensions, specifically trade restrictions that limit the export of its advanced machines to certain markets. High research and development costs are necessary to maintain its technological lead, which can strain resources if demand softens. The company also faces competition from firms like Nikon and Canon in the less advanced segments of the lithography market.

Intel has said demand is outrunning its manufacturing capacity, which caps how fast it can grow. Its foundry business is still losing money while it works to win outside customers. Additionally, Intel must navigate intense regulatory scrutiny over its relationship with the U.S. government and potential conflicts arising from high-level political interactions.

Valuation comparison

ASML trades at a lower forward P/E than Intel based on future earnings estimates, while Intel trades at a lower P/S ratio.

Metric	ASML Holding	Intel
Forward P/E	38.1x	71.2x
P/S ratio	17.3x	10.4x

Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers. P/E is forward; P/S is trailing.

Which stock would I buy in 2026?

The full-year numbers above tell an old story. Both stocks have moved a long way since December, and the reasons matter more than the multiples.

ASML raised its 2026 sales outlook twice this year. In January, it guided to 34 billion to 39 billion euros. By July, after a second quarter of 9.3 billion euros in sales at a 54% gross margin, the range was 43 billion to 45 billion euros. Every chipmaker racing to add AI capacity buys its EUV machines from one company, and ASML says customers are committing to orders years out. The stock is up about 60% in 2026, so that's no secret. The business is growing fast enough to earn its price.

Intel's turnaround is real. Second-quarter revenue grew 25%, its fastest pace in more than 15 years, and gross margin rose to 40.4% from 27.5%. The reported $11 billion loss was a non-cash accounting charge tied to shares held for the U.S. government, not an operating problem. Still, the foundry lost $2.1 billion last quarter, and the stock has more than tripled this year on the promise that Intel will become a true rival to Taiwan Semiconductor Manufacturing (NYSE:TSM). That is a bet on execution, priced as if it already paid off.

I would buy ASML. It gets paid whichever chipmaker wins, and it keeps 29 cents of every sales dollar. Intel fits as a small position for investors who can hold through the swings while the foundry proves itself.

Mike Schwenk has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML, Intel, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.