Quick Summary
- Freedom Broker elevated ASML to “buy” status with a price target increase from $950 to $1,650
- First-quarter revenue reached €8.77 billion, surpassing analyst estimates by 1.5%, while EPS came in at €7.15 versus €6.60 expected
- EUV technology represented 66% of system revenue, a significant jump from the previous quarter’s 48%
- The company increased its 2026 full-year revenue guidance to a range of €36–€40 billion from €34–€39 billion
- Wells Fargo elevated its price target to $1,750 while maintaining its Overweight stance
The semiconductor equipment manufacturer delivered impressive first-quarter results that captured Wall Street’s attention. Following the earnings release, Freedom Broker issued an upgrade on Thursday, while Wells Fargo had already increased its price target a day earlier.
First-quarter revenue totaled €8.77 billion, representing a 13.2% increase compared to the same period last year. The figure positioned itself at the upper end of ASML’s projected range and exceeded analyst forecasts by 1.5%.
The company achieved a 53% gross margin, reaching the top of its 51%–53% guidance corridor. Earnings per share on a diluted basis registered at €7.15, surpassing the consensus estimate of €6.60 by 8.3%.
A particularly notable development was the transformation in revenue composition. EUV systems contributed 66% to total system revenue during the first quarter, climbing from 48% in the preceding three-month period. This translates to approximately €4.1 billion generated from EUV technology alone.
System sales on a net basis 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” while delivering “quite some strong gross margins.”
Major Customer Orders Fuel Growth Trajectory
While ASML refrained from revealing precise first-quarter booking figures, Freedom Broker highlighted substantial customer commitments already secured. SK Hynix locked in an $8 billion purchase order, with Samsung subsequently committing $7.4 billion.
CEO Christophe Fouquet indicated that order momentum “continues to be very strong,” noting that clients have “increased their expected short- and medium-term demand” for the company’s technology portfolio.
Regional distribution showed South Korea’s share of shipments surging to 45% from 22% in the previous quarter. Meanwhile, China’s proportion declined to 19% from 36%. Memory chip-related system sales represented 51% of the total, climbing 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 came in marginally below the €9.08 billion consensus expectation, the company enhanced its full-year 2026 revenue forecast to €36–€40 billion from the prior €34–€39 billion range. The gross margin outlook for the full year remained unchanged at 51%–53%.
Wall Street Responds with Bullish Revisions
Fouquet explained that the enhanced outlook stems from customers accelerating their capacity expansion strategies “for 2026 and beyond, supported by long-term agreements.”
Freedom Broker recalibrated its financial models post-earnings, now anticipating €39.6 billion in revenue with EPS of €32.28 for 2026. Looking to 2027, the firm forecasts €46.4 billion in revenue alongside EPS of €39.35. The revised $1,650 price objective applies a 36x multiple to anticipated 2027 earnings.
The firm attributed its upgrade to elevated financial projections, persistent customer demand, and enhanced forward visibility stemming from multi-year contracts and expanding installed base revenue streams.
Wells Fargo adjusted its target upward to $1,750 from $1,650 one day prior, reaffirming its Overweight rating. The investment bank characterized the market’s response as “overdone” and maintains a positive stance on ASML shares. The firm anticipates the stock will benefit from improving 2027 outlook clarity, especially regarding low-numerical-aperture EUV equipment, projecting shipments exceeding 80 low-NA EUV units that year.
Wells Fargo additionally emphasized the raised 2026 guidance being fueled by demand outside China as a constructive element in its reassessment.
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