Why ASML Holding (ASML) Could Be the Biggest AI Chip Enabler

Brown Advisory, an investment management company, released its "Brown Advisory Global Leaders Strategy" for the second quarter of 2026 investor letter. A copy of the letter can be downloaded here. Brown Advisory's Global Leaders Strategy delivered a net return of 4.6% in the second quarter of 2026, underperforming its benchmark, the MSCI ACWI Net Index, which returned 14.9%. The relative weakness was driven mainly by underexposure to semiconductors and technology hardware, while software, cloud services, and financial holdings also weighed on performance. The strategy benefited from holdings in areas tied to AI infrastructure, with semiconductor exposure and AI-related investments gaining from strong demand. Looking ahead, Brown Advisory sees an attractive environment for active stock-picking, with its ready-to-buy list at its highest level since the COVID-19 period and an estimated 12%-13% average five-year base-case IRR, while maintaining a focus on quality, valuation discipline, and long-term cash-flow generation. In addition, please check the Fund's top five holdings to know its best picks in 2026.

In its second-quarter 2026 investor letter, Brown Advisory Global Leaders Strategy Fund highlighted stocks like ASML Holding N.V. (NASDAQ:ASML). ASML Holding N.V. (NASDAQ:ASML) develops and manufactures advanced lithography systems used by semiconductor manufacturers to produce cutting-edge chips. The one-month return of ASML Holding N.V. (NASDAQ:ASML) was 0.87% while its shares traded between $716.20 and $1999.96 over the last 52 weeks. On August 7, 2026, ASML Holding N.V. (NASDAQ:ASML) stock closed at approximately $1704.37 per share, with a market capitalization of about $668.71 billion.

Brown Advisory Global Leaders Strategy Fund stated the following regarding ASML Holding N.V. (NASDAQ:ASML) in its Q2 2026 investor letter:

ASML Holding N.V. (NASDAQ:ASML) continues to benefit from the build-out of AI infrastructure and remains a critical enabler of leading-edge semiconductor manufacturing. ASML's dominant position in Extreme Ultraviolet (EUV) lithography, where it holds a monopoly in the equipment required for leading-edge semiconductor manufacturing, positions it well to benefit from continued AI-driven capacity expansion and meaningful long-term revenue growth.

For illustration purposes only. Photo from Pixabay/Pexels

ASML Holding N.V. (NASDAQ:ASML) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. As per our database, 133 hedge fund portfolios held ASML Holding N.V. (NASDAQ:ASML) at the end of the first quarter, which was 101 in the previous quarter. While we acknowledge the risk and potential of ASML Holding N.V. (NASDAQ:ASML) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered ASML Holding N.V. (NASDAQ:ASML) and shared Emerald Wealth Partners' views on the company. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.