The Dutch lithography giant bought back 64,023 of its own shares for €79.4 million in the week ending April 24, a routine operation that underscores just how much cash ASML is throwing off. But beneath that calm surface, two distinct storms are brewing — one from Washington, the other from a sudden wobble in the AI narrative that had been lifting the entire semiconductor sector for 18 straight trading days.
A Sector Rally Hits the Wall
The selloff that hit ASML on Tuesday was triggered by a Wall Street Journal report that OpenAI had missed its user and revenue targets. The Nasdaq-100 dropped roughly one percent as doubts about near-term AI profitability prompted a wave of profit-taking. ASML shares fell as much as 4.7 percent intraday before closing 3.3 percent lower. Over the past seven days, the stock is down around six percent.
Yet even after that pullback, the shares trade nearly 19 percent above where they started the year and have more than doubled from their 52-week low of €584.40. The longer-term picture remains robust — but the short-term mood has clearly shifted.
The MATCH Act Looms
A far more structural threat is making its way through the US Congress. The MATCH Act, introduced on a bipartisan basis in early April, would prohibit ASML from selling or servicing its DUV immersion tools — the most advanced machines below the EUV threshold — to Chinese customers such as SMIC, Huawei, and YMTC. Analysts estimate DUV immersion systems account for 10 to 15 percent of ASML’s total revenue, with China representing roughly half of that segment. In a worst-case scenario, the legislation could shave 7 to 10 percent off the company’s top line.
The timing is awkward. China’s share of ASML’s system sales has already been shrinking — it fell to 19 percent in the first quarter of 2026, down from 36 percent in the prior quarter. ASML’s own guidance for around 20 percent China exposure was issued before the MATCH Act was even introduced. The bill still needs to clear both chambers of Congress and be signed by the president, so it is far from law. But it is a risk that will hang over the stock well into the second half of 2026.
Strong Fundamentals, Fresh Orders
None of this political noise has dented ASML’s operational performance. The company reported first-quarter 2026 net sales of €8.8 billion, beating the consensus estimate of €8.5 billion. Net profit came in at €2.8 billion, €300 million above expectations. Management raised its full-year revenue guidance to a range of €36 billion to €40 billion, up from the previous €34 billion to €39 billion.
Should investors sell immediately? Or is it worth buying Asml?
The order book is filling up fast. SK Hynix and Samsung Electronics have each placed orders for EUV machines worth roughly $8 billion. Samsung also ordered 50 older-generation lithography tools, adding billions more in secured revenue. CEO Christophe Fouquet said chip demand is outstripping supply and that customers are accelerating their capacity expansion plans for 2026 and beyond.
Analysts Stay Bullish
The selloff has done little to shake analyst conviction. Goldman Sachs has a €1,570 price target on the stock with a buy rating. Deutsche Bank goes to €1,600, also with a buy. RBC Capital is the most aggressive at €1,700, citing strong demand for EUV technology. On the US side, Wells Fargo reiterated its overweight rating with a $1,750 target, and Bernstein confirmed its buy recommendation on April 23.
The core bull case remains unchanged: no matter which AI company wins the race, it will need high-performance chips, and those chips are made on ASML’s EUV machines. As Fouquet put it, customers are investing in production capacity to avoid the bottlenecks that plagued the industry earlier this decade.
Buybacks and Dividends Keep Flowing
The €12 billion buyback program covering 2026 through 2028 is proceeding on schedule. In the first quarter alone, ASML deployed roughly €1.1 billion of that authorization. Cumulatively, the company has returned around €45 billion to shareholders through dividends and share repurchases.
At €1,172, the stock sits about 9 percent below its 52-week high from February but remains nearly 21 percent above its 200-day moving average. On a one-year view, the shares have nearly doubled — a testament to how powerfully the market has priced in the structural AI story.
The question now is whether Washington’s legislative calendar or a sudden loss of AI enthusiasm will prove the bigger headwind. For the moment, ASML’s fundamentals are strong enough to absorb either shock — but not both at once.
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