ASML Holding N.V. ASML is scheduled to report third-quarter fiscal 2026 earnings on Oct. 14, before market open. The Zacks Consensus Estimate for sales and earnings is pegged at $13.18 billion and $12.47 per share, respectively. Earnings estimates for ASML in 2026 and 2027 have declined over the past 60 days.
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Earnings Surprise History
The leading advanced semiconductor manufacturing equipment firm has delivered a four-quarter earnings surprise of 3.91%, on average.
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Earnings Whispers
Our proven model predicts a likely earnings beat for ASML for the third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. That is exactly the case here.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
ASML currently has an ESP of +4.49% with a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Shaping Upcoming Results
During the quarter, ASML announced a collaboration with Xanadu Quantum Technologies Limited to advance lithography processes for Xanadu’s photonic quantum hardware. The partnership is aimed at exploring how advanced lithography innovations can reduce optical losses in quantum computing chips and support progress toward utility-scale quantum computing. The companies will evaluate lithography-enabled process approaches designed to improve patterning control and enable lower-loss photonic structures.
ASML and Samsung Electronics expanded their long-standing strategic partnership, strengthening cooperation in High-NA EUV lithography and advanced semiconductor manufacturing technologies. The collaboration is intended to accelerate the development and deployment of next-generation technologies capable of meeting the rising performance and efficiency requirements of semiconductor manufacturing, particularly amid growing demand related to AI applications.
In the quarter under review, ASML announced that it has begun construction of its second major industrial campus in the Brainport region of the Netherlands. The company, along with its partners, marked the occasion with a groundbreaking ceremony at Brainport Industries Campus North. The multi-phase development is expected to eventually cover approximately 350,000 square meters and accommodate up to 20,000 workplaces. The new campus is designed to keep key activities closely integrated within the Brainport region while strengthening ASML’s broader global operational network.
ASML announced that it has extended its collaboration with Intel. ASML’s High NA EUV lithography has helped Intel Foundry in Panther Lake production. The companies are collaborating to develop increasingly complex AI products to support future High NA EUV scaling. This will bring together the lithography ecosystem around larger-format masks. These developments are expected to have a favorable impact on ASML’s fiscal third-quarter results.
Price Performance
ASML has gained a stellar 89.1% over the past year compared with the sector’s growth of 32.1%. It has outperformed peers like Advanced Energy Industries, Inc. AEIS but lagged Silicon Motion Technology Corporation SIMO. While AEIS has gained 67.6%, SIMO has soared 205.3% over this period.
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Key Valuation Metric
From a valuation standpoint, ASML appears to be trading at a premium relative to the industry. The company trades at a forward price-to-sales ratio of 11.74, higher than the industry average of 11.11.
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Investment Considerations
ASML’s growth outlook remains closely tied to the growing demand for advanced semiconductor capacity backed by continued expansion of AI infrastructure. Growing demand for smaller, more advanced chips and high-performance memory is requiring chipmakers to use more sophisticated lithography technology, driving growth across ASML’s portfolio. Management expects 2026 advanced foundry Logic revenues to rise about 25%, while Memory revenue is projected to increase 75%. EUV revenues are expected to grow roughly 45%, with DUV, metrology and inspection revenue projected to increase about 25%.
The company is also benefiting from recurring service revenues and software-led upgrades that enable customers to improve productivity without purchasing entirely new systems. ASML also has relatively strong demand visibility, with customer commitments extending into 2027 and 2028.
However, ASML remains exposed to several risks. Its growth increasingly depends on semiconductor manufacturers maintaining elevated capital spending, particularly on AI-related capacity. China is expected to account for roughly 20% of 2026 sales, making the company vulnerable to changes in export restrictions.
End Note
As a leading provider of holistic lithography solutions, ASML is benefiting from a demand cycle that extends beyond a single node transition. ASML offers strong long-term growth potential, backed by AI-driven semiconductor demand and its leadership in lithography, but policy risks and execution challenges remain. Premium valuation leaves very little room for execution-related risks. ASML carries a Zacks Rank #3 with a VGM Style Score of B, a moderately favorable combination rather than a strong directional signal. Long-term investors could hold on to the stock, but new investors should wait for a better entry point.
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This article originally published on Zacks Investment Research (zacks.com).