Sands Capital, an investment management company, has released its second-quarter 2026 investor letter for the Sands Capital Global Growth Fund. Global Growth seeks out the best growth businesses worldwide, using a research team that explores developed and emerging markets for sustainable competitive advantages.

During the quarter, global equities rebounded strongly, driven by AI infrastructure, a key market theme, with demand for computing capacity remaining robust and large technology firms maintaining significant capital investments. Emerging markets, led by Korea and Taiwan, outperformed U.S. and developed markets for six consecutive quarters. The strategy's portfolio returned 22.2%, outperforming the MSCI All Country World Index's 14.9%. The quarter's gains were mainly due to earnings growth in AI infrastructure businesses. Relative results were driven by information technology and industrials, while financials and communication services detracted. The strategy is positioned to capitalize on evolving growth opportunities, with substantial exposure to AI infrastructure and other long-term prospects.

In its second-quarter 2026 investor letter, Sands Capital Global Growth Fund highlighted ASML Holding N.V. (NASDAQ: ASML) as a notable contributor. ASML is a Dutch-based semiconductor company that provides lithography solutions. The company is the sole global supplier of extreme ultraviolet (EUV) lithography systems, which are required to manufacture the most advanced chips, giving it a distinctive position in the semiconductor supply chain. Its equipment sits upstream of the AI buildout: hyperscale capital spending on data centers ultimately translates into demand for the machines that fabricate AI accelerators, high-bandwidth memory, and advanced logic. The performance of Korea- and Taiwan-based chipmakers and equipment buyers, which helped lead emerging markets during the quarter, is also closely tied to the health of this supply chain. On September 4, 2026, the stock closed at $1,714.88 per share. Over the past month, ASML has declined 1.07%, while its shares have gained 115.37% over the last 52 weeks. The company has a market capitalization of $651.11 billion, and the stock has traded within a 52-week range of $786.75 to $1,999.96.

Sands Capital Global Growth Fund stated the following regarding ASML in its Q2 2026 investor letter:

"ASML Holding N.V. (NASDAQ:ASML) is a Dutch semiconductor equipment company specializing in lithography systems, which chipmakers use to print patterns on silicon wafers. ASML's investment results primarily reflected rising long-term expectations for memory systems sales, as AI demand increases the need for advanced DRAM and logic chips. We believe lithography capacity could become one of the hardest constraints to scaling AI infrastructure, potentially creating tight supply conditions for years. Our bottom-up analysis suggests both Chinese and non-Chinese fabs may need to materially increase lithography capacity to meet AI chip demand. Agentic AI could also increase CPU intensity in data centers, with some observers expecting the CPU-to-GPU ratio to move from one CPU per four to eight GPUs toward one-to-one or higher. For ASML, more advanced CPUs and broader AI infrastructure buildout should support additional leading-edge logic demand. We believe ASML remains well positioned as AI drives greater chip complexity, higher wafer requirements, and increased lithography intensity."

The letter's focus on lithography capacity as a potential constraint reflects a broader industry dynamic: as AI models grow in size and sophistication, chipmakers are pushing toward smaller transistor geometries and more complex packaging, steps that require more lithography passes per wafer. ASML's orders and guidance are therefore a widely watched indicator of how quickly the industry expects leading-edge capacity to expand.

ASML is not on Insider Monkey's list of the 40 Most Popular Stocks Among Hedge Funds. According to its database, 140 hedge fund portfolios held ASML at the end of the second quarter, up from 133 in the previous quarter.

This article is originally published at Insider Monkey.