Applied Materials vs. ASML: Which Tech Stock Is a Better Buy in 2026?

Applied Materials and ASML Holding N.V. are two key players in the infrastructure sector, each offering different exposure to the global tech economy. Applied Materials provides materials engineering solutions that enable the fabrication of complex microchip layers, while ASML controls the lithography process crucial for high-end semiconductor manufacturing. Both companies are often compared due to their foundational roles, yet they present distinct investment opportunities.

Applied Materials' latest annual report, filed for the fiscal year ending on October 26, 2025, highlights its significance in aiding manufacturers to produce smaller and faster processors. During this period, two major customers accounted for around 19% and 15% of the company's net revenue, indicating a notable concentration risk. This concentration, combined with recent regulatory shifts, adds a layer of uncertainty to Applied Materials' business model.

On the other hand, ASML's core technology is essential for the lithography process that enables the production of advanced semiconductors. While Applied Materials deals with the materials needed for chip fabrication, ASML's role is pivotal in the manufacturing cycle itself. The investment decision between these two giants depends on one's perspective on the relative importance of materials engineering versus the lithography process in the evolving tech landscape.

Moreover, Applied Materials recently settled a $252 million case related to export violations, involving Semiconductor Manufacturing International, which could impact its future financial performance. Both companies face unique challenges and opportunities, making the decision of which one is a better buy in 2026 a complex one that requires careful consideration of various factors.