Key Takeaways
- Freedom Broker elevated ASML to “buy” status with a new price target of $1,650, up sharply from $950
- First-quarter revenue reached €8.77 billion, surpassing analyst estimates by 1.5%, while EPS of €7.15 exceeded the €6.60 forecast
- Revenue from EUV systems represented 66% of total system sales, a significant increase from the previous quarter’s 48%
- The company increased its 2026 revenue projection to a range of €36–€40 billion, up from the previous €34–€39 billion estimate
- Wells Fargo increased its price target to $1,750 while maintaining an Overweight stance
The Dutch semiconductor equipment manufacturer delivered impressive first-quarter results that caught the attention of major Wall Street analysts. On Thursday, Freedom Broker elevated its rating on ASML, following Wells Fargo’s price target adjustment a day earlier.
The company reported first-quarter revenue of €8.77 billion, representing a 13.2% increase compared to the same period last year. This figure approached the upper boundary of ASML’s internal projections and exceeded Wall Street’s consensus estimate by 1.5%.
The company’s gross margin reached 53%, hitting the upper limit of its forecasted 51%–53% range. Diluted earnings per share landed at €7.15, surpassing analyst predictions of €6.60 by 8.3%.
A particularly notable development was the composition of revenue sources. EUV systems contributed 66% of total system revenue during the first quarter, marking a substantial jump from the previous quarter’s 48%. This translates to approximately €4.1 billion in EUV-related sales.
Total net system sales totaled €6.28 billion. Revenue from installed base management reached €2.49 billion, exceeding the €2.37 billion analyst consensus. CFO Roger Dassen noted this segment performed “a little bit above guidance” with “quite some strong gross margins.”
Major Asian Orders Fuel Growth Trajectory
While ASML didn’t provide specific first-quarter booking figures, Freedom Broker highlighted substantial commitments already secured. SK Hynix committed to an $8 billion purchase order, with Samsung contributing an additional $7.4 billion order.
CEO Christophe Fouquet indicated that order intake “continues to be very strong,” noting that clients have “increased their expected short- and medium-term demand” for the company’s equipment.
Regional distribution showed significant shifts, with South Korea’s share of shipments climbing to 45% from the prior quarter’s 22%. Conversely, China’s portion declined to 19% from 36%. Memory chip-related system sales represented 51% of the total, up from 30% in the fourth quarter, propelled by high-bandwidth memory requirements.
Looking ahead to the second quarter, ASML projected revenue between €8.4–€9 billion. While this fell modestly short of the €9.08 billion consensus, the company elevated its full-year 2026 revenue outlook to €36–€40 billion from the prior €34–€39 billion range. The gross margin forecast for the full year remained unchanged at 51%–53%.
Wall Street Responds with Bullish Revisions
Fouquet attributed the improved guidance to customers accelerating their capacity expansion plans “for 2026 and beyond, supported by long-term agreements.”
Freedom Broker revised its financial models after the earnings release, now anticipating €39.6 billion in revenue and EPS of €32.28 for 2026. Looking further ahead to 2027, the firm projects €46.4 billion in revenue with EPS of €39.35. The updated $1,650 price target applies a 36x multiple to projected 2027 earnings.
The firm cited elevated estimates, persistent demand patterns, and improved long-term visibility from multi-year purchase agreements and expanding installed base revenue streams as key factors behind the upgrade.
Wells Fargo adjusted its target upward to $1,750 from $1,650 one day prior, maintaining its Overweight rating. The investment bank characterized the market’s reaction as “overdone” and continues to recommend buying ASML shares. It anticipates the stock will benefit from clearer 2027 projections, especially regarding low-numerical-aperture EUV systems, with Wells forecasting shipments exceeding 80 low-NA EUV units in that year.
Wells Fargo also emphasized that the enhanced 2026 forecast being fueled by demand outside China represents an encouraging element in its refreshed analysis.
