ASML Holding's (ASML) stock has surged by almost 90% in the last 52 weeks and commands a market valuation of over $700 billion. While the rally has been significant, there are multiple reasons to remain bullish. Therefore, the correction from all-time highs is a good opportunity to consider exposure before the company reports Q3 results on Oct. 14.
Coming to the positives, ASML is poised to reap sustained benefits from structural tailwinds for the semiconductor industry. Within the broad ecosystem, ASML has strong positioning with innovation as the differentiator. As an example, the company is the sole commercial supplier of EUV (extreme ultraviolet) lithography systems. This ensures healthy margins as demand remains robust and ASML has the pricing power.
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Further, ASML has guided for full-year revenue of €44 billion (mid-range). With 1H revenue at €18.1 billion, the delivery ramp is expected to translate into 2H revenue of €25.9 billion. Therefore, upcoming quarters will be catalysts for stock upside.
About ASML Stock
Headquartered in Veldhoven, Netherlands, ASML Holding is an innovator in the global semiconductor ecosystem. The company works with partners to provide hardware, software, and services that help chipmakers create powerful, affordable, and energy-efficient microchips.
More specifically, the company’s lithography solutions are central in the manufacture of advanced semiconductor equipment systems. For FY25, ASML reported revenue of €32.7 billion. For the same period, the company had a healthy gross margin of 52.8%. With a focus on innovation, ASML reported an R&D expense of €4.7 billion for FY25.
Further, for the first half of 2026, ASML reported healthy revenue growth of 17.5% on a year-on-year (YoY) basis to €18.1 billion. The company has also increased its FY26 sales guidance to the range of €43 billion and €45 billion, with a gross margin between 54% and 56%.
Considering the growth momentum and optimistic guidance, ASML stock has trended higher by 28% in the past six months. However, with a price-earnings-to-growth ratio of 0.94, there seems to be potential for further upside.
www.barchart.com Strong Growth Outlook Beyond FY2026
For ASML, the healthy growth trajectory is likely to extend beyond the current year. In August 2026, Taiwan Semiconductor (TSM) approved a capital spending of $29.4 billion related to advanced technology capacity and fab construction, among other targets.
Similarly, Micron Technologies (MU) expects capital expenditure of $25 billion for the first half of FY27. Capex is expected to be higher in the second half of FY27. The capital expenditure estimates for these companies are a clear indication of demand for lithography in 2027 and beyond.
Further, for 2027, ASML is “close to being fully covered with orders for Low-NA EUV.” At the same time, the company has “received a significant number of Low-NA EUV orders” for 2028. As the backlog swells, ASML is planning an increase in capacity, and this further underscores visibility for robust growth.
It’s also worth adding here that the management sees AI-related demand in advanced logic and DRAM “accelerating the move towards more advanced lithography solutions.” This strengthens the case for incremental demand.
Amidst these positives, ASML distributed a dividend of €7.50 per ordinary share in 2025. With growth likely to sustain, value creation will continue through dividends and share repurchases.
What Do Analysts Say About ASML Stock?
Based on 27 analysts with coverage, ASML stock has a consensus “Strong Buy” rating. While 22 analysts have a “Strong Buy” rating for the stock, two have a “Moderate Buy,” and three have a “Hold” rating.
The mean price target of $2,359.50 represents a potential upside of 29% from current levels. Further, the most bullish price target of $2,915 suggests that ASML stock could climb as much as 59% from here.
www.barchart.com On the date of publication, Faisal Humayun Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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