Key Highlights
- Freedom Broker elevated ASML to “buy” status, increasing the price target from $950 to $1,650
- First-quarter revenue reached €8.77 billion, surpassing analyst consensus by 1.5%, alongside EPS of €7.15 compared to the €6.60 estimate
- EUV systems contributed 66% of total system revenue, rising from the previous quarter’s 48%
- The company elevated its 2026 annual revenue projection to a range of €36–€40 billion, revised upward from €34–€39 billion
- Wells Fargo increased its price target to $1,750 while maintaining an Overweight stance
The semiconductor equipment manufacturer delivered impressive first-quarter results, capturing the attention of major Wall Street analysts. Freedom Broker initiated an upgrade for ASML on Thursday, following Wells Fargo’s target adjustment a day earlier.
First-quarter revenue reached €8.77 billion, representing a 13.2% increase compared to the same period last year. The figure positioned near the upper boundary of ASML’s internal forecast and exceeded analyst projections by 1.5%.
Gross margin achieved 53%, matching the top end of the company’s projected 51%–53% corridor. Diluted earnings per share reached €7.15, surpassing the consensus estimate of €6.60 by 8.3%.
A particularly notable metric was the transformation in revenue composition. EUV systems represented 66% of system revenue during the first quarter, climbing from 48% in the preceding three-month period. EUV products alone generated approximately €4.1 billion.
Net system sales totaled €6.28 billion. Revenue from the installed base management segment reached €2.49 billion, exceeding the €2.37 billion analyst consensus. CFO Roger Dassen noted this business segment performed “a little bit above guidance” while delivering “quite some strong gross margins.”
Major Orders From South Korean Chipmakers Fuel Growth
ASML withheld specific first-quarter booking numbers, though Freedom Broker highlighted substantial commitments already secured. SK Hynix committed to an $8 billion purchase, with Samsung contributing another $7.4 billion order.
CEO Christophe Fouquet characterized order intake as maintaining “very strong” momentum, noting customers have “increased their expected short- and medium-term demand” for the company’s equipment portfolio.
Regional distribution showed South Korea climbing to 45% of total shipments from the prior quarter’s 22%. China’s share decreased to 19% from 36%. Memory chip applications represented 51% of system sales, up from Q4’s 30%, propelled by high-bandwidth memory requirements.
Second-quarter revenue guidance ranges between €8.4 billion and €9 billion. While this came in below the €9.08 billion analyst consensus, the company elevated its full-year 2026 projection to €36–€40 billion, revised upward from €34–€39 billion. Annual gross margin guidance remained at the 51%–53% range.
Wall Street Analysts Respond to Performance Metrics
Fouquet attributed the enhanced outlook to customers accelerating capacity expansion plans “for 2026 and beyond, supported by long-term agreements.”
Freedom Broker revised its financial models after reviewing the quarterly results, currently forecasting €39.6 billion in revenue with EPS of €32.28 for 2026. Looking toward 2027, the firm anticipates €46.4 billion in revenue alongside EPS of €39.35. The updated $1,650 price target applies a 36x multiple to anticipated 2027 earnings.
The firm cited the upgrade as reflecting elevated estimates, continuing demand strength, and enhanced visibility stemming from multi-year purchase commitments and expanding installed base contributions.
Wells Fargo adjusted its target upward to $1,750 from $1,650 the previous day, retaining its Overweight classification. The investment bank characterized the market response as “overdone” and continues recommending ASML shares. The firm anticipates the stock will benefit from improving 2027 projections, especially concerning low-numerical-aperture EUV equipment, with Wells forecasting shipments exceeding 80 low-NA EUV units during that year.
Wells Fargo additionally highlighted the upgraded 2026 forecast being powered by demand outside China as a constructive element in its revised perspective.
