The arithmetic looks compelling on paper. ASML’s biggest customers are pouring more than half a trillion euros into new fabrication plants, yet the Dutch chip-equipment giant’s shares keep sliding. On Tuesday, the stock dropped 3.78% to €1,535.60, pushing the week’s loss past 11% and leaving it more than 12% below the all-time high of €1,748 reached on June 30.
That disconnect — between soaring analyst targets and a falling share price — sets the stage for what promises to be a pivotal moment when ASML reports second-quarter results in July.
The Bull Case: Money Is No Object
Optimists point to a spending cycle that looks unstoppable. Memory-chip makers are running hard to keep up with artificial-intelligence demand. Micron boosted its capital-expenditure budget for the current fiscal year to $27 billion after beating expectations in its third fiscal quarter. Samsung and SK Hynix together announced investments worth $520 billion for new memory fabs — facilities that rely almost entirely on ASML’s extreme ultraviolet (EUV) lithography tools.
ASML’s own numbers underline the momentum. The company raised its 2026 revenue forecast in the first quarter from a range of €34-€39 billion to €36-€40 billion, citing record orders from the AI segment. Chief Executive Christophe Fouquet recently stated that chip demand exceeds supply and that customers are accelerating capacity plans for 2026 and beyond.
Wall Street has responded with a flurry of target upgrades. Bernstein analyst David Dai reiterated his buy rating on Monday and lifted his price objective by a third to $2,623, arguing that ASML will ship 91 EUV systems in 2027 and 113 in 2028. Susquehanna nearly doubled its target to €2,350, Bank of America raised its to $2,345, and Wells Fargo pushed its to $2,200.
The Bear Case: Politics and Technical Caution
Yet those bullish calls are colliding with a very real set of headwinds. The Dutch government has formally joined the U.S.-led Pax Silica export-control alliance, raising expectations of tighter multilateral restrictions on chip-making equipment. U.S. authorities are also investigating potential technology leaks to China. Chinese customers account for roughly 20% of ASML’s planned system revenue for 2026.
Chief Financial Officer Roger Dassen has tried to frame the risk as manageable, noting that the company’s revenue guidance of €36-€40 billion includes room to absorb the impact of new export curbs. He added that some demand from China could be picked up by other customers. Still, Dassen acknowledged that stricter controls could push revenue toward the lower end of that range.
Should investors sell immediately? Or is it worth buying Asml?
Another risk lies inside ASML’s own product line. Key foundry customers, including TSMC, are delaying the transition to ASML’s expensive high-NA EUV systems, opting instead for cheaper advanced-packaging alternatives. That hesitancy dampens the upgrade cycle that some analysts are betting on.
The stock’s 30-day annualised volatility of 63% underscores how sensitive it is to any headline on trade policy or technology adoption.
Technical Picture: Room to Run or a Deeper Correction?
Despite the recent pullback, ASML shares remain 55% higher year to date. The stock trades comfortably above its 200-day moving average of €1,155.59 and is still 10.1% above its 50-day average. The relative-strength index stands at 52.4, suggesting the equity is not yet overbought and could still rally.
But the decline from the June peak has been sharp. A sustained break below the 50-day line near €1,450 would put the 100-day average around €1,326 in play — a level closer to what the bears would view as fair value given the geopolitical overhang.
What July’s Earnings Will Settle
The quarterly report due in mid-July — ASML has not yet confirmed an exact date — will be the first real test of whether exuberant analyst targets can coexist with an increasingly complex operating environment. Investors will scrutinise the company’s comments on Chinese exposure, the pace of high-NA adoption, and whether the €36-€40 billion revenue band for 2026 still holds.
Dassen has already signalled that ASML can navigate within that guidance even under tighter export rules. The question is whether the market believes him — or whether the gap between record orders and political risk proves too wide to close without a deeper reset.
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