- Price
- $1642.38
- Fair value
- $2050.00
- Discount
- 19.9%
- Uncertainty
- High
- LSEG rating
- 1.76
- Moat
- Wide
- Next earnings
- 2027-01-14
- Next earnings is estimate
- Yes
- Company name
- ASML
- Sector
- Semiconductor equipment
- About
- ASML makes lithography machines, which print the patterns of chips onto silicon wafers. It is the only company that sells extreme ultraviolet (EUV) lithography machines, which chipmakers need for the most advanced logic and memory chips. It also sells deep ultraviolet (DUV) machines and measurement and inspection systems. Its customers are chipmakers such as TSMC, Samsung, Intel and memory makers. ASML makes money from system sales and from Installed Base Management, which is service, upgrades and parts for machines that customers already own. In Q3 2026, net system sales were EUR 8.4 billion and Installed Base Management sales were EUR 3.3 billion. ASML is based in the Netherlands and reports in euros, and its US shares are American depositary shares.
- Thesis
- ASML trades at a discount because investors fear that chip equipment demand is near the top of a cycle that depends on AI spending, and that export controls can cut sales to China. Chip equipment orders have fallen sharply after past booms. ASML's 2026 sales outlook rose from EUR 36 to 40 billion in April 2026 to EUR 44 to 45 billion in October 2026, and investors doubt that this level can last if AI investment slows. Its 2026 releases also do not report net bookings, so investors have less data on future demand. In April 2026, the CEO said that the guidance range covered possible outcomes of discussions on export controls. For the gap to close, ASML must deliver Q4 2026 sales of EUR 14.2 to 15.2 billion, give a 2027 outlook with more sales as it adds about 30% to its EUV and DUV immersion capacity, and show that customers sign orders for 2028 and later. Export rules must also stay stable. The first test is the Q4 2026 report, expected in January 2027, with the first view of 2027. The second test is the Capital Markets Day on June 10, 2027, where ASML will update its longer-term views. If demand stays above capacity, the gap can close over the next three to five quarters. The main risk is a fall in AI chip investment that leads customers to delay machine orders.
- Risks
- Chip equipment demand is cyclical. ASML's 2026 growth depends on AI investment in advanced logic and memory chips. If AI spending slows, chipmakers can delay or cancel machine orders, and sales can fall fast, as they did after past booms.
Export controls from the Netherlands and the US limit what ASML can sell to China. In April 2026, the CEO said that the 2026 guidance covered possible outcomes of discussions on export controls. Stricter rules can cut sales of DUV machines and service in China.
ASML depends on a small number of large customers, such as TSMC, Samsung and Intel. A delay at one customer, such as a slower factory build, can move large orders from one year to the next.
ASML plans to add about 30% of EUV and DUV immersion capacity in 2027 and maybe more in 2028. If suppliers, such as Zeiss for optics, cannot keep up, ASML cannot ship all the machines that customers order.
ASML reports in euros, and the US shares trade in US dollars. A weaker euro lowers the US dollar value of its profits.
- Balance sheet
- Cash: €12.7B
Debt: €2.0B
Net cash: €10.8B
At September 27, 2026, ASML had EUR 8.0 billion of cash and EUR 4.7 billion of short-term investments. Long-term debt was EUR 2.0 billion. The statements do not show the current part of debt as a separate line. Shareholders' equity was EUR 22.1 billion. Free cash flow was EUR 11.4 billion in Q3 2026. ASML bought back EUR 6.1 billion of shares in the first nine months of 2026 under its 2026 to 2028 program. It pays interim dividends of EUR 1.88 per share, and the next one is payable on November 4, 2026.
As of 2026-09-27.
- Checkpoints
- Jan 14, 2027 (estimate): Q4 2026 results and 2027 outlook. Pending. Watch: Q4 2026 sales within EUR 14.2 to 15.2 billion and a 2027 outlook with sales growth from the added capacity pass; a 2027 outlook with flat or lower sales fails.
Jun 10, 2027: Capital Markets Day: longer-term targets. Pending. Watch: Higher targets for 2030 sales and margin with more EUV capacity pass; lower targets or a cautious view of AI demand fail.
- Recent events
- 2026-10-14: ASML reported record Q3 2026 results. Total net sales were EUR 11.7 billion, near the top of its guidance, and the gross margin was 57.5%. Net income was EUR 5.0 billion. ASML narrowed its 2026 sales outlook to EUR 44 to 45 billion, with a gross margin of about 56%, and guided Q4 2026 sales of EUR 14.2 to 15.2 billion. The CEO said that supply for 2027 and 2028 will not fully meet demand, that ASML is looking at ways to add more than the planned 30% of capacity in 2028, and that some customers want to place orders for 2029 and 2030. ASML bought back about EUR 4.1 billion of shares in the quarter.
2026-10-14: In its Q3 2026 presentation, ASML said that it and TSMC started a plan to move to larger 12-inch photomasks for High-NA EUV. ASML said that this can raise productivity by more than 40% for exposures that need two masks.
2026-07-15: ASML reported Q2 2026 results. Total net sales were EUR 9.3 billion, and the gross margin was 54.0%. It raised its 2026 sales outlook to EUR 43 to 45 billion. It said that it plans to add 30% to its 2026 capacity of about 65 low-NA EUV systems and about 130 DUV immersion systems in 2027, and that it is looking at another 30% in 2028. It set its next Capital Markets Day for June 10, 2027.
2026-04-15: ASML reported Q1 2026 results. Total net sales were EUR 8.8 billion, the gross margin was 53.0%, and net income was EUR 2.8 billion. It guided 2026 sales of EUR 36 to 40 billion. The CEO said that the range included possible outcomes of the discussions on export controls.