Let's stop pretending and be honest with each other...

Processing img 5cz665xj4cuf1...

Dear Fellow Traveler:

Remember back in September when we dove deep into ASML?

It was the first time we’d pitched the concept of K Street Confidential (still a work in progress and open to discussion…) Well… it was quite the call…

That Dutch juggernaut that builds $380 million machines… These are machines so complex that they take 250 crates to ship and weigh as much as the Statue of Liberty.

An author at Seeking Alpha just called ASML a “mispriced gem in the booming semiconductor world.”

Yep… we’re aware… When the retail investment crowd starts parroting your contrarian picks, you know the thesis is gaining traction.

But here’s what they’re missing in their surface-level analysis...

ASML isn’t just riding the AI wave… they ARE the ocean.

Every single advanced semiconductor on the planet depends on ASML’s Extreme Ultraviolet (EUV) lithography machines. There’s literally no alternative.

Canon is a decade behind. Nikon gave up. China is banned from buying them.

It’s like owning the only company that makes oxygen generators while everyone else is holding their breath.

Now… look at this math…

Their next-generation High-NA EUV machines are priced at $400 million each, and they already have “10 to 20” orders. That’s potentially $8 billion in revenue for machines that don’t technically exist yet.

Talk about pricing power. As I said in our earnings preview… backlogs… matter…

But there’s a geopolitical angle that Seeking Alpha missed…

Turns out… the U.S. government has weaponized ASML’s monopoly against China. By pressuring the Dutch to expand export controls, America has created the perfect chokepoint in the global tech supply chain. Chokepoints are a big deal in finance…

With ASML, we see where global markets meet national security interests.

It’s like Andrew Carnegie’s steel monopoly for the digital age, backed not just by technological superiority but by Uncle Sam’s geopolitical strategy.

The stock might look expensive at current levels, but monopolies don’t play by normal valuation rules.

Microsoft trades at 35 times earnings. ASML at 25 times forward earnings looks like a bargain for a company that controls the future of computing.

Sometimes the most obvious investment is the one everyone overlooks because it’s too obvious. But I find myself repeating myself alot in this world drowning in capital…

What else do I think?

No. 2: Oh No… Anyway…

Click here to finish this article free on Substack