ASML Earnings: Outlook Is Magnificent, but Valuation Overshoots Our Estimate

Key Morningstar Metrics for ASML

• Fair Value Estimate
  : EUR 1,200
• Morningstar Rating
  : ★★
• Morningstar Economic Moat Rating
  : Wide
• Morningstar Uncertainty Rating
  : High

What We Thought of ASML’s Earnings

ASML’s ASML first quarter, updated 2026 EUR 36 billion-EUR 40 billion revenue outlook, and management commentary were very bullish. This is no surprise, as demand for advanced logic and memory semiconductors remains very strong, with potential undersupply extending to 2028 or beyond.

Why it matters: ASML no longer reports quarterly bookings, but we surmise orders were very strong this quarter, probably above EUR 10 billion. SK Hynix ordered USD 8 billion in extreme ultraviolet machines in March, according to Reuters, and Samsung ordered 20 EUV machines (about EUR 4 billion-EUR 5 billion), according to SE Daily. TSMC 2330 is building multiple fabs across Taiwan and the US, and an Intel rebound could move the needle even further for ASML.

The bottom line: We raise our fair value estimate to EUR 1,200/USD 1,400 from EUR 1,000/USD 1,170. We have raised our medium and long-term revenue forecasts, mainly for more EUV shipments.

• Large orders from SK Hynix 000660 and Samsung 005930 failed to lift the stock on the day they were reported by the media, signaling to us that there is a lot of optimism priced in. ASML currently trades at 45 times 2026 earnings and 34 times 2027 earnings, based on our estimates. At this multiple, bringing incremental positive news to push the stock higher is becoming more difficult.
• Our EUR 60 billion revenue forecast for 2030 is at the top of ASML’s EUR 44 billion-EUR 60 billion range. A potential investor day could raise 2030 guidance further, but even then, our estimate could be in the upper end of any new range.

Bears say: The new US Match Act is a key risk to watch. It could put EUR 5 billion-EUR 7 billion in China sales at risk if a full immersion lithography ban takes place. This is roughly 15% of ASML’s revenue at the midpoint of its 2026 guidance.

Bulls say: Demand is so strong that even if the Match Act becomes law, ASML could redirect most of that demand somewhere else, as it looks overbooked until 2027-28. Memory needs a lot of deep ultraviolet lithography.