J P M O R G A N Europe Equity Research 28 January 2026 ASML 4Q First take: Order blowout indicates a major upgrade cycle Our Take: 4Q 2025 is the last quarter ASML will report orders and with an order number of €13.2bn which is 88% /93.6% ahead of JPMe/cons. The company is guiding to FY26 sales of €34-30bn which is €36.5bn at the midpoint or up 11.7% YoY which is 3.5% ahead of consensus. Overall the FY26 guidance is positive, but the very robust order intake points to an even stronger FY27 where estimates a ...

Core Viewpoint - ASML Holding N.V. is viewed positively by BofA Securities, which maintains a Buy rating and a price target of $1,672, citing limited competitive risk from China and a positive outlook on edge AI [1][2]. Group 1: Competitive Landscape - BofA believes that China's advancements in EUV technology pose a limited competitive threat to ASML, as China's capabilities are several years behind [2][3]. - Structural disadvantages such as lack of global integration and deep customer collaboration hinder China's ability to compete at the cutting edge, reinforcing ASML's technological leadership [2]. Group 2: Market Position - Leading semiconductor manufacturers like TSMC and Intel are unlikely to adopt Chinese EUV tools, while domestic companies such as SMIC and CXMT will continue to purchase ASML's immersion and local EUV systems [3]. - Although China may gain some market traction through discounted pricing in emerging markets, it does not significantly threaten ASML's market position [3]. Group 3: Investment Perspective - While ASML is recognized as a strong investment opportunity, BofA suggests that certain AI stocks may offer greater upside potential with less downside risk [3].

ASML Holding NV Conference Call Summary Company Overview - **Company**: ASML Holding NV (ASML.AS) - **Industry**: European Semiconductors - **Market Cap**: €457,030 million - **Current Share Price**: €1,149.40 (as of January 15, 2026) - **Price Target**: Raised from €1,000 to €1,400 Key Points 1. Earnings Growth Expectations - **2027 Earnings Growth**: Projected to be the highest with expectations of €46.8 billion in sales and an EPS of approximately €45.7, indicating a 57% year-over-year growth [3][7] - **Sales Breakdown**: Anticipated sales include around €15 billion from DUV tools and €9.9 billion from IBM, with revenue recognition for approximately 6 High NA systems contributing an additional €2-3 billion [3][14] 2. Demand and Capacity Insights - **Foundry and Memory Capex**: Increased capex expected in 2027 for foundry and memory sectors, driven by strong demand from companies like TSMC and Samsung [3][7] - **China Demand**: Better than feared demand from China, with expectations for sales to remain flat year-over-year instead of the previously anticipated decline of 15-20% [21][7] 3. Market Dynamics - **DRAM Pricing**: Strong pricing in DRAM driven by server CPU demand and AI-related needs, with expectations for continued high prices leading to a significant capacity build-out in 2026-27 [19][7] - **EUV Tool Shipments**: Anticipated shipments of approximately 80 EUV tools in 2027, with TSMC expected to ramp up capacity earlier than previously assumed [3][15] 4. Financial Projections - **2026 Financials**: Projected sales of €36.5 billion for FY26, with a 12% year-over-year growth expected [28][7] - **Operating Income**: Expected to reach €19.7 billion in 2027, with a gross margin of approximately 56.2% [14][7] 5. Risks and Challenges - **Potential Risks**: Risks include a sudden inventory digestion phase in AI and a near-term peak in DRAM pricing, which could impact future earnings [7][19] 6. Upcoming Earnings Report - **4Q25 Earnings**: Scheduled for January 28, 2026, with expectations for a stronger order intake of €7.27 billion compared to €5.40 billion in Q3 [24][30] 7. Analyst Ratings - **Stock Rating**: Overweight, with ASML being a top pick in the semiconductor sector [5][7] 8. Historical Context - **Historical Performance**: The company has shown consistent growth, with significant increases in revenue and EPS over the past years, reflecting strong market positioning and demand for its products [31][7] Conclusion ASML Holding NV is positioned for significant growth in 2027, driven by increased demand in the semiconductor industry, particularly in foundry and memory sectors. The company is expected to benefit from strong pricing in DRAM and a favorable demand outlook from China, despite potential risks that could impact its performance. The upcoming earnings report will provide further insights into the company's order intake and financial health.

Core Viewpoint - ASML Holding N.V. has received a significant upgrade in rating and price target due to anticipated growth driven by increased demand for EUV technology and expansion opportunities with TSMC [1][2]. Group 1: Rating and Price Target Changes - Aletheia Capital analyst Warren Lau upgraded ASML's rating from Sell to Buy and raised the price target from $750 to $1,500 [1]. - The revised target price is based on a 30x FY27E PER, reflecting a strong outlook for the company [2]. Group 2: Demand and Revenue Forecasts - Analysts expect a surge in EUV demand from DRAM suppliers and robust DUV orders from China, particularly in FY26E [2]. - TSMC is projected to install 40-45 EUV tools, potentially increasing total EUV units to 75-80, nearing ASML's full capacity [3]. - ASML's Low-NA EUV revenue is forecasted to grow by one-third in FY26 and accelerate by 50-60% in FY27, driven by higher volumes and an improved product mix [3]. Group 3: Sales Growth Projections - Overall sales growth for ASML is anticipated to be in the mid-teens for FY26E, accelerating to the mid-twenties in FY27E, which exceeds both company guidance and consensus forecasts [4].

Core Viewpoint - Semiconductor stocks are crucial for the AI and data center boom, with a focus on companies supplying chipmaking equipment rather than just chips [1] Group 1: ASML's Position and Performance - ASML has received a significant endorsement from Morgan Stanley, which raised its price target and named it a Top Pick in European semiconductors due to strengthening demand in memory and logic sectors [2] - ASML is the largest supplier of chipmaking equipment globally, with its EUV tools being essential for producing advanced CPUs, GPUs, and memory chips, creating a unique oligopoly in the market [4] - ASML's stock has increased approximately 55% year-to-date in 2025, driven by rising demand for chips in AI and data centers [5] Group 2: Financial Performance - In Q3 2025, ASML reported sales of €7.5 billion, slightly higher than the previous year, and net income of about €2.1 billion, with earnings per share at €5.49, surpassing year-ago figures [7] - The company's gross margin remained strong at just over 51% [7] Group 3: Valuation Concerns - Despite strong performance, ASML's valuation is considered high, with a forward P/E ratio around 35x, significantly above the sector median of 23x [6]

ASML Holding NV Conference Call Summary Company Overview - **Company**: ASML Holding NV (ASML.AS) - **Industry**: Technology - European Semiconductors - **Market Cap**: €341,480 million - **Current Share Price**: €858.80 (as of November 24, 2025) - **Price Target**: Raised from €975.00 to €1,000.00 Key Points Industry Dynamics - **DRAM Demand**: Strong demand for DRAM technology transitions, particularly the shift from 1a and 1b nodes to 1c nodes, is expected to increase EUV layer requirements, with 5-6 layers anticipated at 1c [3][8] - **Foundry Spending**: Continued solid demand from foundry spending, particularly from major players like Samsung and Hynix, is noted for FY26 [3][4] - **China Market**: Anticipated decline in demand from China, estimated at 15-20% YoY, with a conservative outlook embedded in the estimates [10][12] Financial Performance - **Revenue Growth**: Projected revenues for FY26 are €34,141 million, up from €32,624 million in FY25, indicating a growth rate of approximately 4.7% [6][21] - **Earnings Per Share (EPS)**: Expected EPS for FY26 is €26.31, reflecting a growth from €25.20 in FY25 [6][21] - **Margins**: Despite a slowdown in DUV sales, margins are expected to remain resilient due to higher EUV sales and improvements in Installed Base Management (IBM) [4][9] Strategic Insights - **EUV Tool Sales**: ASML anticipates selling 48 EUV tools in FY26, up from 41 in FY25, which is expected to positively impact margins [4][9] - **Installed Base Management**: Improvements in service efficiencies and a shift from upgrades to services are expected to enhance IBM margins [8][9] - **NVIDIA Impact**: Positive developments from NVIDIA, including record revenues and strong demand for AI chips, are expected to indirectly support ASML's foundry equipment supply and DRAM demand [11][12] Market Sentiment - **Shift in Sentiment**: The sentiment around ASML has improved since summer 2025, driven by significant events in the semiconductor industry, including investments in AI and memory supercycle dynamics [15][14] - **Order Book Stability**: The order book is stabilizing after a period of volatility, with indications of a recovery in demand [17][19] Risks and Considerations - **Geopolitical Uncertainty**: Ongoing geopolitical tensions and trade restrictions, particularly concerning China, continue to pose risks to ASML's sales and market outlook [13][14] - **DUV Sales Decline**: A projected decline of approximately 6% YoY in DUV sales is expected to balance out the margin benefits from EUV sales [9][12] Conclusion ASML Holding NV is positioned to benefit from strong DRAM demand and foundry spending, with a positive outlook for FY26. The company is expected to maintain resilient margins despite challenges in the DUV segment, and the recent developments in the semiconductor industry, particularly from NVIDIA, are likely to provide additional support for ASML's growth trajectory. The raised price target reflects confidence in ASML's recovery and market position.

Summary of ASML Holding (ASML.AS) Conference Call Company Overview - **Company**: ASML Holding (ASML.AS) - **Market Cap**: €330.8 billion / $384.4 billion - **Industry**: European Semiconductors Key Points Industry Dynamics - **AI Demand**: The demand for AI infrastructure is significantly increasing, positively impacting leading-edge Logic/Memory semiconductor capital equipment [2][6] - **Semicap Tracker**: Positive inflection noted in four out of six categories tracked in the European semicap sector, indicating a robust demand environment [5][9] - **WFE Growth**: The US semiconductors team has revised growth expectations for Wafer Fabrication Equipment (WFE) in 2025/2026 to 9% year-over-year growth, up from previous estimates of 5% and 2% [6][10] Company Performance - **Order Cadence**: ASML requires an order intake of slightly over €2 billion per quarter to meet the current consensus estimate for 2026 systems revenue, which is considered undemanding compared to historical averages [10][11] - **Stock Performance**: ASML shares have increased by approximately 30% in the last month but still lag behind its semicap peers in price performance over the past year [11][12] - **Valuation**: ASML currently trades at a 12-month forward P/E multiple of 35x, which is a 60% premium to the broader EU Tech sector, indicating potential for further valuation re-rating [14][16] Customer and Market Insights - **Key Contracts**: OpenAI signed a $300 billion contract with Oracle for computing capacity, and CoreWeave has a multi-year agreement with Meta for AI infrastructure [2][4] - **Memory Supply Needs**: OpenAI requires 900,000 DRAM wafers monthly, to be supplied by Samsung and SK Hynix, highlighting the strong demand for memory chips [2][4] Risks and Challenges - **Mature Node Demand**: Limited visibility around recovery in mature node demand, with geopolitical uncertainties potentially impacting ASML's operations, particularly in China [8][19] - **Regulatory Impact**: AMAT expects a $600 million headwind to FY26 revenue due to US export restrictions, which could affect the semiconductor equipment sector [8][19] Future Outlook - **Revenue Projections**: ASML's revenue estimates for 2026/27 are projected to be 3%/6% above consensus, driven by favorable positioning in the leading-edge semis supply chain and AI demand [11][19] - **Long-term Growth**: Forecasts suggest a potential re-acceleration to double-digit growth in 2027 as EUV layer growth resumes [9][19] Conclusion - **Investment Recommendation**: Goldman Sachs reiterates a "Buy" rating for ASML with a 12-month price target of €935, indicating an upside of 9.8% from the current price of €851.80 [20][19]

Summary of ASML Holding NV Conference Call Company Overview - **Company**: ASML Holding NV - **Industry**: Technology - European Semiconductors - **Market Cap**: €349,950 million - **Current Stock Price**: €880.10 (as of October 3, 2025) - **Price Target**: €950.00 Key Points Industry and Market Dynamics - The semiconductor capital equipment market is expected to recover, with ASML being a focal point of interest among investors in the US and Europe [1][3] - ASML has been perceived as a laggard in the semiconductor sector, particularly in relation to the AI boom, but the negative revision cycle appears to have ended [1][3] Financial Performance and Projections - Revenue projections for ASML are set to increase from €28,263 million in FY24 to €39,212 million in FY27, indicating a growth trajectory [5][19] - EUV (Extreme Ultraviolet) unit sales are expected to rise from 42 in 2025 to 61 in 2027, reflecting increased demand from major clients like Samsung [3][5] Memory Spending and Key Clients - Incremental spending on memory is anticipated to surpass that of TSMC, with Samsung being a significant driver of this growth [7][19] - The consensus expects Samsung to increase its memory spending, which could reverse the flat earnings growth seen in recent years [3][19] Order Book and Market Sentiment - There is uncertainty regarding near-term order intake, with expectations of a thin Q3 order book but a potentially better Q4 [9][19] - The market is cautious about immediate order increases from Samsung due to its existing backlog, with a more significant uptick expected in Q4 [9][19] Risks and Challenges - Risks to ASML's growth thesis include a weaker-than-expected order book, a slowdown in AI capital expenditures, and potential export restrictions affecting sales [21][24] - The anticipated sales from China are projected to decline from €8.5 billion (26% of group sales) this year to about €8 billion (25%) next year, indicating a potential reduction in growth from this market [15][19] Valuation and Investment Thesis - The current valuation reflects a recovery cycle with a projected P/E multiple in the high-20s, supporting a price target of €950 [20][22] - The market has yet to fully recognize ASML's cost controls and the strengthening memory spend, which could lead to positive earnings revisions [20][22] Conclusion - ASML is positioned for a cyclical recovery in the semiconductor capital equipment market, with strong projections for revenue and EUV sales driven by key clients like Samsung. However, the company faces risks related to order intake and market dynamics, particularly in China. The investment thesis remains positive, supported by a favorable valuation outlook.

Summary of ASML Holding (ASML.AS) Conference Call Company Overview - **Company**: ASML Holding (ASML.AS) - **Industry**: European Semiconductors, Hardware and Gaming Tech Key Points Demand Trends and Market Position - ASML maintains a **Buy rating** due to improving fundamentals and an attractive valuation despite a recent **15% rally** in share price [1][7] - Strong demand for leading-edge semiconductors is driven by **AI applications**, with expectations of continued spending momentum as demand outstrips supply [1][4] - Notable investments in AI infrastructure include **Nvidia's** projection of **$3 trillion** in capital investment by **2030** and **OpenAI's** **$300 billion** contract with Oracle [1][4] Strategic Partnerships - The **Samsung and Tesla deal** is viewed positively as it broadens ASML's lithography customer base and reduces dependence on a single customer [1][5] - The agreement for **2nm production** may extend into **2027**, but is expected to enhance competitive dynamics in the foundry space [5] Geopolitical and Regulatory Environment - Recent US-China trade agreements, including the allowance of **H20 chip shipments** to China, are expected to support demand [5] - The US-Europe agreement has alleviated some geopolitical uncertainties, reducing the risk of a **30% tariff** on EUV tools [5] Financial Projections - ASML is projected to require a **€2 billion** quarterly order intake to meet revenue estimates for **2026**, which is below the **5-year median** of **€5 billion** [5] - Management anticipates a gradual normalization of its China exposure, with Chinese sales expected to contribute around **20%** of total revenues going forward [5] Technological Advancements - The transition to **Gate-All-Around (GAA)** technology is expected to positively impact lithography intensity, essential for achieving incremental performance gains [6] - The adoption of **EUV technology** is anticipated to accelerate in DRAM as customers increase layer additions [6] Valuation and Risks - ASML's **12-month price target** is set at **€935**, based on a **32x** P/E multiple for **2026** [7][11] - Key risks include potential **EUV delays**, capex cyclicality, and unfavorable market share shifts [7] Competitive Landscape - ASML currently trades at a **12-month forward P/E multiple of 30x**, which is a **32% premium** to the broader EU Tech sector, lower than its **10-year median premium of 35%** [8][11] - The company is seen as having a stronger competitive moat and better growth opportunities compared to its peers [8][11] Additional Insights - Management's confidence in the China market is supported by structural demand trends and a broadening customer base, particularly in the automotive sector [5] - Incremental investments from memory players are expected to positively impact demand levels, despite regulatory challenges affecting advanced DRAM [5] This summary encapsulates the key insights from the ASML conference call, highlighting the company's strategic positioning, market dynamics, and financial outlook.

ASML Holding (ASML.AS) Conference Call Summary Company Overview - **Company**: ASML Holding (ASML.AS) - **Event**: Communacopia + Technology Conference - **Presenters**: Jim Kavanagh (Head of Investor Relations), Ted Shafer (Director Investor Relations Americas) Key Industry Insights 1. Positive Developments from Trade Agreements - Recent trade agreements between the US and EU are seen as incrementally positive for ASML, particularly for 2026, as they reduce the risk of a 30% tariff on EUV tools that had previously caused hesitation among fab owners [2][4] 2. China Demand Normalization - Demand from China is expected to gradually normalize, contributing around 20% of total revenues in the future, down from the mid-20s percentage today. Management anticipates a softening of demand in 2026, but SMIC's capacity additions are viewed as a positive driver [2][7] 3. Leading-edge Logic Demand - There are no signs of disruption in leading-edge Logic demand, with a well-defined baseline for customer discussions focused on technology ramp profiles. ASML expects continued orders for 2nm tools through the second half of 2025 into 2026 [2][8] 4. DRAM EUV Adoption - The adoption of EUV technology in DRAM is expected to offset a near-term pause in lithography intensity. ASML anticipates a rise in EUV penetration as DRAM roadmaps progress beyond 1β to 1γ nodes [2][8] 5. Strategic Partnerships - ASML's partnership with Mistral aims to enhance its AI capabilities, aligning with customer needs and facilitating the development of tailored AI solutions. This partnership is expected to support ASML's AI roadmap [2][8][9] Financial Outlook 1. Revenue Projections - ASML's revenue is projected to grow from €28.26 billion in 2024 to €39.93 billion by 2027, indicating a strong growth trajectory [10] 2. Price Target and Rating - ASML is rated as a "Buy" with a 12-month price target of €935, representing an upside of 36.9% from the current price of €683.20 [10] Key Risks - Potential risks include delays in EUV technology, cyclicality in capital expenditures, and unfavorable shifts in market share [10] Additional Insights - The management highlighted that while there is uncertainty related to macroeconomic factors, recent datapoints have become more positive post-results, indicating a healthier competitive dynamic in the foundry space [2][6]