Key Takeaways
- Freedom Broker elevated ASML to a “buy” rating and increased its price objective to $1,650 from $950
- First-quarter revenue reached €8.77 billion, exceeding analyst estimates by 1.5%, while EPS came in at €7.15 versus €6.60 forecasted
- Extreme ultraviolet lithography systems represented 66% of system sales, climbing from 48% in the previous quarter
- The company elevated its 2026 full-year revenue projection to €36–€40 billion, up from the prior €34–€39 billion range
- Wells Fargo increased its price objective to $1,750 while maintaining an Overweight stance
The Dutch semiconductor equipment manufacturer delivered impressive first-quarter results that caught the attention of financial analysts. Freedom Broker elevated its rating on Thursday, following Wells Fargo’s price target adjustment a day earlier.
First-quarter sales totaled €8.77 billion, representing a 13.2% increase compared to the same period last year. The figure positioned near the upper boundary of the company’s projected range and surpassed Street expectations by 1.5%.
The gross margin reached 53%, matching the top end of management’s 51%–53% forecast. Diluted earnings per share of €7.15 exceeded the Street consensus of €6.60 by 8.3%.
A notable highlight was the changing revenue composition. Extreme ultraviolet systems accounted for 66% of system sales during the first quarter, a significant increase from 48% in the preceding three-month period. This translates to approximately €4.1 billion generated from EUV technology alone.
Net system revenue totaled €6.28 billion. The installed base management segment generated €2.49 billion, surpassing the €2.37 billion analyst forecast. CFO Roger Dassen noted this division performed “a little bit above guidance” with “quite some strong gross margins.”
Major Orders From Korean Chipmakers Fuel Growth Trajectory
ASML didn’t reveal specific first-quarter booking figures, but Freedom Broker highlighted substantial commitments already secured. SK Hynix committed to an $8 billion purchase order, while Samsung contributed a $7.4 billion order.
CEO Christophe Fouquet indicated that order momentum “continues to be very strong” and that clients have “increased their expected short- and medium-term demand” for the company’s equipment portfolio.
From a regional perspective, South Korea’s share of shipments surged to 45% from 22% in the previous quarter. China’s portion declined to 19% from 36%. Memory semiconductor products represented 51% of system revenue, up from 30% in the fourth quarter, propelled by high-bandwidth memory requirements.
For the second quarter, management projected revenue between €8.4–€9 billion. While this came in modestly below the €9.08 billion consensus, the company enhanced its full-year 2026 outlook to €36–€40 billion, up from €34–€39 billion. The gross margin guidance for the full year remained unchanged at 51%–53%.
Wall Street Responds with Positive Revisions
Fouquet explained the enhanced outlook stems from customers accelerating their capacity expansion plans “for 2026 and beyond, supported by long-term agreements.”
Freedom Broker revised its financial models post-earnings, now forecasting €39.6 billion in revenue and earnings per share of €32.28 for 2026. Looking to 2027, the firm projects €46.4 billion in revenue with EPS of €39.35. The revised $1,650 price objective derives from a 36x multiple on anticipated 2027 earnings.
The firm cited the rating improvement reflects elevated financial projections, consistent demand patterns, and enhanced clarity from multi-year purchasing commitments and expanding installed base revenue streams.
Wells Fargo adjusted its target to $1,750 from $1,650 the previous day while maintaining its Overweight recommendation. The firm characterized the market’s response as “overdone” and continues to advocate purchasing ASML shares. It anticipates the stock will benefit from improving 2027 outlook visibility, especially regarding low-numerical-aperture EUV systems, with Wells forecasting shipments exceeding 80 low-NA EUV units that year.
Wells Fargo also emphasized the upgraded 2026 guidance being fueled by demand outside China as a constructive element in its revised assessment.
