Stock of the Week: ASML - Softer Outlook Dampens Sentiment
Will 2026 deliver flat performance or growth?
Here is the 26th edition of “Stock of the Week”. You can find all the previous analyses and my articles on my main page (for an easier search, use a computer, mobile version is harder to navigate).
Here are the links to the 3 previous “Stocks of the Week” as well
Analysts and investors reacted negatively to the Q2 2025 earnings, mainly due to a softer outlook particularly for 2026. Let’s take a closer look.
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The stock at a glance
Recent news
Geopolitical challenges. ASML faces uncertainty due to US and Dutch (European) export restrictions on advanced chipmaking tools to China, impacting its business outlook and creating uncertainties
High-end technology. ASML shipped its fifth High NA EUV system in Q1 2025, now deployed at 3 customers, enhancing advanced chip production capabilities
Tariff. Recent US tariff policy shifts, including sector-specific measures, create a volatile environment for ASML, though electronics and semiconductors have seen temporary relief
AI demand. ASML highlights robust AI-driven demand for its EUV tools and expects continued growth though this demand appears somewhat softer than previously anticipated (at least in the short-term)
Last earnings report
ASML delivered a solid quarterly performance, posting 23% YoY revenue growth and a 47% increase in EPS.
Bookings came in at €5.5B, a decent result, though somewhat below expectations.
The concern lies in management’s cautious commentary on 2026. They flagged uncertainty around tariffs and geopolitical tensions, casting doubt on the previously anticipated return to strong growth. Instead, 2026 now looks likely to be flat or only modestly positive.
This shift is reflected in EPS estimates. Analysts have been gradually trimming their forecasts for 2026 (and even 2027) with current projections sitting about 30% below where they stood a year ago.
Despite these near-term adjustments, ASML has reaffirmed its 2030 financial targets, supported by a market opportunity that remains highly promising.
Analysts’ recommendations
July, 17. DZ Bank. Buy —> Hold. 675€ —> 655€
July, 17. JP Morgan. Buy. 970€ —> 822€
July, 17. Jefferies. Hold. 690€ —> 660€
July, 17. Bernstein. Hold. 700€ —> 640€
July, 17. Goldman Sachs. Buy. 910€ —> 935€
July, 17. Deutsche Bank. Buy. 750€ —> 700€
July, 17. Oddo. Buy. 810€ —> 780€
July, 17. HSBC. Buy. 855€ —> 809€
My analysis
The steadily declining outlook for 2026 and 2027 points to a deeper concern: even with ASML’s monopoly on the most advanced lithography machines, demand appears softer than anticipated
Geopolitical risks( including tensions around Taiwan, China, and potential tariffs) only add to the uncertainty
However, the long-term picture remains intact. ASML has reiterated its 2030 financial targets, aiming for revenues between 44B€ and 60B€, underpinned by strong structural demand drivers
That said, short-term headwinds may persist, especially if net bookings fail to pick up meaningfully. This serves as a timely reminder that, despite its technological leadership, ASML operates in a fundamentally cyclical industry
Technical analysis
I have defined three buying zones that I find interesting for long-term investments during pullbacks. While these zones may not be reached, I am prepared for a market (or stock) consolidation to seize long-term opportunities. For me, this approach offers a better risk/reward ratio.
Of course, this is just my opinion, and I am sharing it with you, but each investor should decide on their own investment style. With that said, here are my three buying zones for ASML.
Buying zone 1. 620€
Buying zone 2. 545€
Buying zone 3. 420€
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Used source: Marketscreener.com. Affiliate link just here
balanced view of the near term headwinds and LT opportunity.. too often an analysis revolves around its monopoly (which everyone knows and hence priced in) but too little is shared about why the near term headwinds (besides tsmc, samsung and intc are struggling w/ leading edge nodes)
Who are you though? So over all these Substack writers who post anonymously. If you’re any good, put your name and bio behind your site.