ASML Shares Surge on Upgraded Outlook and Consecutive Price Target Hikes

TLDR

• Freedom Broker has moved ASML to a “buy” rating, increasing its price target to $1,650 from $950
• First-quarter revenue reached €8.77 billion, surpassing analyst estimates by 1.5%, with EPS of €7.15 compared to the expected €6.60
• EUV systems accounted for 66% of system revenue, a significant jump from 48% in the previous quarter
• ASML has increased its 2026 revenue forecast to a range of €36–€40 billion, up from the prior €34–€39 billion
• Wells Fargo also boosted its price target to $1,750 while maintaining an Overweight rating

(SeaPRwire) –   ASML delivered a robust performance in the first quarter, capturing Wall Street’s attention. Freedom Broker upgraded the semiconductor equipment leader on Thursday, following a price target hike from Wells Fargo the day before.

ASML Holding N.V., ASML

Q1 revenue was reported at €8.77 billion, a 13.2% increase year-over-year. This result was at the upper end of ASML’s guidance and 1.5% higher than consensus projections.

Gross margin reached 53%, hitting the top of the company’s 51%–53% forecast. Diluted EPS came in at €7.15, beating the €6.60 estimate by 8.3%.

A significant highlight was the shift in the product mix. EUV systems represented 66% of system revenue in Q1, up from 48% in the prior quarter, contributing roughly €4.1 billion from EUV technology alone.

Net system sales totaled €6.28 billion. Revenue from installed base management reached €2.49 billion, exceeding the €2.37 billion consensus. CFO Roger Dassen noted that this segment performed slightly above expectations with strong gross margins.

Momentum Driven by Orders from Samsung and SK Hynix

While ASML did not provide specific Q1 order intake totals, Freedom Broker highlighted major commitments already secured. SK Hynix placed an order worth $8 billion, followed by a $7.4 billion order from Samsung.

CEO Christophe Fouquet stated that order intake remains very strong and noted that clients have increased their short- and medium-term demand expectations for ASML’s equipment.

Geographically, South Korea’s share of shipments rose to 45% from 22% the previous quarter, while China’s share decreased to 19% from 36%. Memory chips accounted for 51% of system sales, up from 30% in Q4, fueled by demand for high-bandwidth memory.

For the second quarter, ASML projects revenue between €8.4 billion and €9 billion. While this was slightly below the €9.08 billion consensus, the company raised its full-year 2026 revenue outlook to €36–€40 billion, up from €34–€39 billion. The gross margin guidance for the full year remains at 51%–53%.

Analyst Upgrades Follow Financial Results

Fouquet mentioned that the improved outlook is a result of customers accelerating their capacity plans for 2026 and beyond, supported by long-term agreements.

Freedom Broker updated its financial models after the results, now forecasting €39.6 billion in revenue and an EPS of €32.28 for 2026. For 2027, it anticipates €46.4 billion in revenue and an EPS of €39.35. The new $1,650 price target is based on a 36x multiple of projected 2027 earnings.

The brokerage stated that the upgrade is driven by higher estimates, persistent demand, and improved visibility from multi-year orders and expanding service revenue.

Wells Fargo increased its own target to $1,750 from $1,650 the previous day, keeping its Overweight rating. The firm characterized the market reaction as excessive and remains a buyer of ASML. It expects the stock to be supported by better visibility into 2027, particularly regarding low-numerical-aperture EUV units, with Wells forecasting more than 80 units shipped that year.

Wells Fargo also highlighted that the upward revision of the 2026 guidance, driven by demand outside of China, is a positive factor in its updated assessment.