Key Takeaways
- Freedom Broker elevated ASML to “buy” status with a new price target of $1,650, significantly higher than its previous $950 target
- First-quarter revenue reached €8.77 billion, surpassing analyst expectations by 1.5%, while earnings per share of €7.15 topped the €6.60 forecast
- Revenue from EUV systems climbed to 66% of total system sales, a notable increase from the previous quarter’s 48%
- The company elevated its 2026 revenue forecast to a range of €36–€40 billion, up from its earlier €34–€39 billion projection
- Wells Fargo increased its price objective to $1,750 while maintaining its Overweight recommendation
The semiconductor equipment manufacturer delivered impressive first-quarter performance that caught the attention of market analysts. On Thursday, Freedom Broker elevated its rating on ASML, following Wells Fargo’s price target adjustment just one day earlier.
First-quarter revenue totaled €8.77 billion, representing a 13.2% increase compared to the same period last year. This figure positioned near the upper boundary of ASML’s internal projections and exceeded Street estimates by 1.5%.
The company achieved a gross margin of 53%, reaching the top of its forecasted 51%–53% band. Diluted earnings per share of €7.15 surpassed the consensus estimate of €6.60 by 8.3%.
A particularly notable metric was the evolution in revenue composition. Extreme ultraviolet lithography systems contributed 66% of total system revenue during the first quarter, a substantial jump from the prior quarter’s 48%. This translates to approximately €4.1 billion generated from EUV systems alone.
System sales on a net basis totaled €6.28 billion. The installed base management segment generated €2.49 billion, exceeding the €2.37 billion analyst forecast. Chief Financial Officer Roger Dassen noted this business segment performed “a little bit above guidance” with “quite some strong gross margins.”
Major Asian Customers Fuel Growth Trajectory
While ASML refrained from publishing specific first-quarter booking figures, Freedom Broker highlighted substantial customer commitments already secured. SK Hynix committed to an $8 billion purchase, while Samsung followed suit with a $7.4 billion order.
Chief Executive Officer Christophe Fouquet characterized order momentum as “continues to be very strong,” adding that clients have “increased their expected short- and medium-term demand” for the company’s technology.
From a regional perspective, South Korea’s share of shipments surged to 45% from the previous quarter’s 22%. Meanwhile, China’s portion decreased to 19% from 36%. Memory chip applications represented 51% of system revenue, climbing from 30% in the fourth quarter, propelled by high-bandwidth memory requirements.
Looking to the second quarter, ASML projected revenue between €8.4 and €9 billion. While this came in marginally below the €9.08 billion consensus, the company enhanced its full-year 2026 projection to €36–€40 billion, up from the prior €34–€39 billion range. The full-year gross margin forecast remained unchanged at 51%–53%.
Wall Street Responds with Upgraded Projections
Fouquet attributed the improved guidance to customers accelerating capacity expansion plans “for 2026 and beyond, supported by long-term agreements.”
Freedom Broker revised its financial models post-earnings, now anticipating €39.6 billion in revenue and earnings per share of €32.28 for 2026. Looking further ahead to 2027, the firm projects €46.4 billion in revenue with EPS of €39.35. Its revised $1,650 price objective applies a 36x multiple to estimated 2027 earnings.
The firm cited elevated estimates, sustained customer demand, and enhanced clarity from multi-year commitments and expanding installed base contributions as rationale for the upgrade.
Wells Fargo adjusted its target to $1,750 from $1,650 one day prior, maintaining its Overweight stance. The investment bank characterized the market’s response as “overdone” and continues recommending ASML shares. It anticipates the stock will benefit from clearer 2027 visibility, especially regarding low-numerical-aperture EUV systems, with Wells forecasting shipments exceeding 80 low-NA EUV units that year.
Wells Fargo also emphasized that the upgraded 2026 outlook being fueled by demand outside China represents an encouraging element in its revised assessment.
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