Following ASML's recent fiscal updates, how does the current adoption rate and transition to High-NA EUV (Twinscan EXE:5200) by major clients like TSMC and Intel impact the 2026-2027 gross margin targets, particularly considering the high initial manufacturing costs of these next-generation systems?

ASML’s transition to High-NA EUV (Twinscan EXE:5200) represents a pivotal shift in its financial and operational roadmap for the 2026–2027 period. While these systems are the primary engine for long-term revenue growth, their high initial manufacturing costs and varying adoption rates among "Big Three" clients (Intel, TSMC, and Samsung) create a complex margin profile in the near term. 📈 2026–2027 Financial Outlook & Margin Targets ASML has provided specific guidance for 2026 and long-term targets for 2030, with 2027 serving as a critical "ramp-up" year for High-NA volume. 2026 Guidance: ASML expects total net sales between €34B and €39B . The gross margin is targeted at 51%–53% , reflecting the dilutive impact of early High-NA shipments. 2027 Trajectory: Analyst consensus suggests revenue could accelerate to approximately $51.3B (approx. €44B ) as High-NA moves from pilot lines to high-volume manufacturing (HVM). 2030 Long-Term Target: ASML maintains a target gross margin of 56%–60% by 2030. The 2026–2027 period is viewed as the "trough" or "investment phase" before economies of scale drive margins toward this higher range. 🏗️ Adoption Rates by Major Clients The adoption of the EXE:5200 is currently bifurcated, impacting ASML’s revenue mix and margin stability. Intel (Aggressive Lead): Intel is the primary driver of High-NA revenue in the 2026–2027 window. It has already begun installing EXE:5200B systems for its Intel 14A node, aiming for HVM by 2027. This early adoption provides ASML with critical "learning curve" data but carries higher initial support and installation costs. TSMC (Conservative/Delayed): TSMC has publicly stated it will skip High-NA for its A16 (2026) and A14 (2027) nodes, opting instead for "Low-NA" EUV (NXE:3800E) with multi-patterning to manage costs. TSMC is expected to transition to High-NA for its A14P node around 2028. This delay limits ASML’s High-NA volume in 2026–2027 but maintains high-margin Low-NA sales. Samsung & Memory: Samsung is receiving systems in late 2025/early 2026 for its 2nm lines. Additionally, DRAM manufacturers (SK Hynix, Micron) are expected to adopt High-NA for advanced memory scaling by 2026, providing a secondary volume driver. 💰 Manufacturing Costs & Margin Dilution The EXE:5200 systems carry a price tag of approximately $380M–$400M+ per unit, more than double the $180M cost of Low-NA systems. Initial Dilution: The first High-NA units are "margin-dilutive" because the cost of goods sold (COGS) is initially high due to unoptimized supply chains and low production volumes. ASML’s 2026 margin guidance of 51%–53% is a direct result of this "product mix" shift. Cost Optimization Path: ASML is utilizing a modular design strategy, reusing components from the NXE (Low-NA) platform to accelerate the learning curve. In recent fiscal updates (Q4 2024), management noted that costs for the first High-NA systems were "lower than planned," suggesting that the margin drag may be less severe than initially feared. Service Revenue Tailwinds: As the installed base of High-NA systems grows in 2027, high-margin service and upgrade revenue (Installed Base Management) is expected to grow at a 12%–14% CAGR , eventually offsetting the initial hardware margin pressure. ⚠️ Risks & Uncertainties Customer Concentration: With Intel as the primary early adopter, any delays in Intel’s 14A roadmap could significantly impact ASML’s 2027 revenue recognition. Geopolitical Constraints: Export restrictions on advanced lithography to China remain a headwind, forcing ASML to rely more heavily on the "Big Three" for margin expansion. Economic Feasibility: If TSMC continues to find Low-NA multi-patterning more cost-effective than High-NA, the "inflection point" for ASML’s 60% margin target could shift further toward 2030.

To what extent do the latest 2026 Dutch and U.S. export control revisions regarding immersion DUV lithography equipment restrict ASML’s ability to service its significant installed base in China, and how much of this regulatory risk is currently baked into the company's full-year revenue guidance?

The 2026 regulatory landscape for ASML is defined by a significant tightening of Dutch and U.S. export controls, specifically targeting the company’s ability to maintain its advanced immersion Deep Ultraviolet (DUV) lithography systems in China. While these measures pose a direct threat to ASML’s service revenue and long-term installed base viability in the region, the company’s latest guidance suggests that the financial impact has been largely mitigated by surging global demand for Artificial Intelligence (AI) infrastructure. 🛠️ Impact on Servicing and Installed Base The latest revisions, which reached a critical implementation phase in early 2026, focus heavily on "chokepoint" technologies. The primary restriction involves the non-renewal of export licenses for servicing and supplying spare parts for the most advanced immersion DUV tools (specifically the TWINSCAN NXT:1970i and NXT:1980i series). Service Limitations: ASML is increasingly restricted from providing on-site technical support and proprietary spare parts to Chinese fabs using these systems. This effectively "clocks" the remaining lifespan of the equipment, as lithography tools require high-frequency maintenance to maintain the nanometer-scale precision necessary for advanced logic and DRAM production. Installed Base Risk: China represents a massive installed base for ASML, having accounted for approximately 42% of total net sales as recently as Q3 2024. The inability to service these machines risks a gradual degradation of China’s domestic manufacturing capacity, particularly at the 7nm and 14nm nodes where immersion DUV is utilized for multi-patterning. Service Revenue Resilience: Despite these localized restrictions, ASML’s overall Installed Base Management revenue is projected to grow in 2026. This is driven by the global expansion of the Extreme Ultraviolet (EUV) fleet, which carries higher service margins and is not subject to the same level of restriction outside of China. 📊 2026 Revenue Guidance & China Exposure In its January 28, 2026, earnings update, ASML provided a full-year revenue outlook that explicitly accounts for a "normalization" of its China business. Revenue Target: ASML guided 2026 total net sales to be between €34B and €39B . This represents a significant increase from the €32.7B reported for 2025, signaling that growth in other regions is expected to more than offset the China decline. China Revenue Share: Management expects China’s contribution to total revenue to drop to approximately 20% in 2026. This is a sharp decline from the 33% share seen in 2025 and the peak levels of 40%+ during the 2024 stockpiling phase. The "AI Offset": The guidance is underpinned by record net bookings of €13.2B in Q4 2025, driven primarily by non-Chinese demand for EUV and High-NA EUV systems. This suggests that the "regulatory risk" is being structurally bypassed by the capital expenditure cycle of global foundries (TSMC, Intel, Samsung) racing to build AI-capable capacity. ⚖️ Market Pricing and Regulatory Risk "Baking" The extent to which this risk is "baked into" the stock price appears high, as evidenced by the market's positive reaction to the 2026 guidance. Analyst Consensus: Prior to the January 2026 update, consensus estimates for 2026 revenue were hovering around €35.1B . ASML’s midpoint guidance of €36.5B exceeded these expectations, suggesting that the market had already priced in a more pessimistic "worst-case" scenario for China. Valuation Multiples: ASML’s forward P/E ratio has stabilized as investors pivot from "geopolitical fear" to "AI execution." The risk of further U.S. unilateral actions (such as the Foreign Direct Product Rule) remains a "tail risk" rather than a baseline assumption, though management has noted that current guidance assumes no further drastic changes to the existing regulatory framework. Margin Pressure: A key remaining uncertainty is gross margin, guided at 51%–53% for 2026. This reflects a less favorable product mix as the company transitions to High-NA EUV, which initially carries lower margins, combined with the loss of high-margin DUV service revenue from China. ⚠️ Key Risks and Uncertainties Secondary Market Leakage: China’s ability to source spare parts through secondary markets or domestic reverse-engineering could mitigate the impact on their fabs but would not contribute to ASML’s top line. Policy Volatility: Bipartisan pressure in the U.S. continues to advocate for a total ban on all DUV exports and servicing, which would represent a further -5% to -10% downside risk to the 2026 revenue midpoint if enacted mid-year.

Given the recent quarterly shifts in capital expenditure from leading logic and memory manufacturers, how does ASML’s current EUV order backlog reflect a potential transition from the 2025 'growth year' into a more normalized semiconductor equipment spending cycle for 2027?

ASML’s current financial positioning, characterized by a record €38.8B order backlog at the end of 2025, signals a strategic pivot in the semiconductor equipment cycle. While 2025 was defined as a "growth year" of recovery, the composition and timing of the current backlog suggest that 2026 will serve as a high-volume transitional bridge into a structurally higher "normalized" spending environment in 2027. Backlog Composition and 2027 Visibility The €13.2B in net bookings reported in Q4 2025—nearly double analyst estimates—indicates that leading-edge manufacturers are securing capacity well into the 2027 calendar year. Delivery Lead Times: Management has noted that the majority of the Q4 surge in orders is scheduled for 2027 delivery. This creates a "revenue floor" for 2026 but limits immediate upside for the current fiscal year, as ASML’s capacity is effectively sold out through 2026. Memory vs. Logic Shift: For the first time, memory orders accounted for 56% of quarterly bookings in late 2025. This reflects a massive shift in CapEx priorities from SK Hynix and Micron as they transition to EUV-intensive High-Bandwidth Memory (HBM4) and DDR5 production, which requires significantly higher tool intensity per wafer than previous generations. Quarterly CapEx Shifts from Leading Manufacturers The transition toward 2027 is being driven by a synchronized "Angstrom Era" ramp-up among the "Big Three" (TSMC, Intel, Samsung): TSMC: Has raised its 2026 CapEx forecast to a record range of $45B–$56B . This spending is heavily weighted toward 2nm (N2) volume production and advanced packaging (CoWoS), with 2027 projected to see even higher tool utilization as N2 reaches full scale. Intel: Management has shifted its 2026 spending profile to be front-half weighted, specifically increasing "tool-in" spending for the 18A and 14A nodes to ensure 2027 readiness. Samsung: After delaying its Taylor, Texas fab to 2027, the company is now aligning its EUV tool deliveries with a 2nm GAA (Gate-All-Around) launch, contributing to the "back-heavy" nature of ASML's current backlog. The 2027 'Normalization' vs. 2025 Growth The industry is moving from a cyclical recovery (2025) to a structural "super-cycle" (2027). Market Scale: SEMI projects global wafer fab equipment (WFE) spending to reach $156B by 2027. This "normalization" represents a plateau at a significantly higher baseline than the previous 2022 peak, driven by the doubling of EUV layers required for sub-2nm nodes. High-NA EUV Transition: 2026 will see the first meaningful revenue recognition from High-NA EUV systems (EXE:5200). However, because these systems carry initially lower margins, the full margin benefit of 56%–60% is not expected to materialize until 2027, when High-NA enters high-volume manufacturing. China Normalization: A key headwind in this transition is the expected decline of China’s revenue share from 33% in 2025 to approximately 20% in 2026. ASML’s backlog suggests that robust demand from Taiwan and the U.S. is sufficient to absorb this -13% regional contraction. Risks and Execution Challenges Despite the record backlog, ASML faces two primary risks in the transition to 2027: 1. Fab Readiness: Revenue recognition is tied to the physical completion of customer cleanrooms. Any delays in fab construction (as seen previously with Intel and Samsung) could push 2026 revenue into 2027. 2. Supply Chain Scaling: To meet the 2027 demand implied by the backlog, ASML must scale its own production capacity to 90 Low-NA EUV and 20 High-NA EUV units annually, a significant operational hurdle that led to the recent announcement of 1,700 leadership job cuts to refocus on engineering efficiency.

ASML Holding N.V. (ASML) Stock Price & AI Analysis

GoAI Score

Sign in to unlock

Valuation

50Fair Value

Sentiment

66Bullish

Risk

62Low Risk

Momentum

100Positive

Institutional-Grade Intelligence

🏆PRO

Actionable Intelligence

AI-driven stance, execution logic & risk thresholds

Catalyst Roadmap

Event timeline with expected impact & market context

Deep Insights

Fact-checked analysis & score logic breakdown

Financial Statements

Margin Trends

Gross

52.8%▲1.6pp

Revenue after COGS

Operating

34.6%▲2.7pp

After operating expenses

Net

29.4%▲2.6pp

Bottom-line profitability

Gross Margin

Operating Margin

Net Margin

Valuation Snapshot

P/E Ratio

38.3

Price vs earnings

EV/EBITDA

28.8

Enterprise value

FCF Yield

3.0%

Cash generation

Earnings Yield

2.6%

Inverse of P/E

Capital Efficiency

35

GoAI Quality ScoreExcellent

ROEReturn on Equity

47.1%Strong

ROAReturn on Assets

18.3%Strong

ROICReturn on Invested Capital

34.1%Strong

Financial Health

Current RatioAdequate

1.26

Short-term solvency (>1.5)

Net Debt / EBITDANet Cash

-0.85x

Debt repayment capacity (<3x)

Income QualityStrong

1.32

Cash backs earnings (>1)

Revenue & Profitability

Revenue

Net Income

Net Loss

Income Statement

Metric	FY2025	FY2024	FY2023	FY2022	FY2021
Revenue	$31.38B	$28.26B	$27.56B	$21.17B	$18.61B
Gross Profit	$16.58B	$14.49B	$14.14B	$10.70B	$9.81B
Gross Margin	52.8%	51.3%	51.3%	50.5%	52.7%
Operating Income	$10.86B	$9.02B	$9.04B	$6.50B	$6.75B
Net Income	$9.23B	$7.57B	$7.84B	$5.62B	$5.88B
Net Margin	29.4%	26.8%	28.4%	26.6%	31.6%
EPS	$23.76	$19.25	$19.56	$13.81	$14.97

Average Price Target

$1458.50▼ 0.8% Downside

Past 12 Months

12 Month Forecast

Based on 50 Wall Street analysts offering 12 month price targets for ASML Holding N.V., the average price target is $1458.50, with a high forecast of $1911.00 and a low forecast of $1150.00. The average price target represents a 0.8% decrease from the current price of $1469.59.

Highest

$1911.00

Average

$1458.50

Lowest

$1150.00

Rating Distribution

Strong Buy

1

2%

Buy

25

57%

Hold

15

34%

Sell

3

7%

Strong Sell

0

0%

Recent Analyst Ratings

FirmActionRatingDate

Barclays▲ Upgrade

Equal Weight→Overweight

2026-01-29

Wells Fargo● Maintain

Overweight

2026-01-29

RBC Capital● Maintain

Outperform

2026-01-29

Bernstein● Maintain

Outperform

2026-01-22

Wells Fargo● Maintain

Overweight

2026-01-15

KGI Securities▲ Upgrade

Hold→Outperform

2026-01-15

JP Morgan● Maintain

Overweight

2026-01-14

Bernstein▲ Upgrade

Market Perform→Outperform

2026-01-05

B of A Securities● Maintain

Buy

2025-12-03

JP Morgan● Maintain

Overweight

2025-12-01

Earnings History & Surprises

BEAT RATE

78%

Last 18 quarters

AVG SURPRISE

+9.3%

EPS vs Estimate

BEATS / MISSES

14/4

Last 18 quarters

LATEST EPS

$8.55

Q1 '26

QUARTERLY EPS TREND

Estimated

Beat

Miss

QUARTERLY DETAIL

Q1 '26

-5.4%

$8.55 vs $9.04

Q4 '25

+2.2%

$6.41 vs $6.27

Q3 '25

-23.4%

$4.55 vs $5.94

Q2 '25

+3.1%

$6.31 vs $6.12

Q1 '25

-1.5%

$7.30 vs $7.41

Q4 '24

+8.5%

$5.74 vs $5.29

Q3 '24

+7.4%

$4.36 vs $4.06

Q2 '24

+10.3%

$3.31 vs $3.00

Q1 '24

+8.9%

$5.64 vs $5.18

Q4 '23

+4.9%

$5.10 vs $4.86

Q3 '23

+8.5%

$5.49 vs $5.06

Q2 '23

+19.3%

$5.74 vs $4.81

Investor Q&A

Top questions investors are asking about ASML Holding N.V.

3 Questions

Ask GoAI anything about ASML Holding N.V.

Latest News

No news available