ASML, based in the Netherlands, is the only company in the world that makes extreme ultraviolet (EUV) lithography machines, without which no leading-edge chip can be made. Sales are up 36% this year, it says demand will outrun its capacity through 2028, and its shares trade in New York as ADRs. All figures are converted to U.S. dollars at $1.123 per euro.
Today’s close against the report’s numbers, updated every weekday. The analysis is as of October 22, 2026; the rating as of October 22, 2026. Both change only when the report is revised.
The cash-flow model’s bear-to-bull range, the probability-weighted value, the price, its 52-week range and the analysts’ average target. The copper line marks the base case; the fine dotted line is today’s close.
Written on October 22, 2026, after its third-quarter results. Figures are from the company’s filings and releases unless noted. Not investment advice. The author holds no ASML shares directly; ASML is held inside the VanEck Semiconductor ETF (SMH) in the author’s portfolio.
Lithography machines print a chip’s circuits onto silicon wafers with light. ASML makes three kinds: EUV, which only it can build and which is needed for every leading-edge logic chip and, increasingly, for DRAM and HBM memory; older DUV machines, where it competes with Nikon and Canon; and High-NA EUV, the next generation, now being tested by chipmakers. About 28% of sales come from servicing and upgrading the machines already installed.
An EUV machine costs about $200 million and takes many months to build, so ASML’s sales follow its customers’ factory plans: TSMC, Samsung, Intel, SK Hynix and Micron. The AI build-out has pushed all of them to add leading-edge capacity at once.
Third-quarter sales rose 55% to €11.7 billion ($13.1 billion), with a record 57.5% gross margin and 121 machines sold, including 17 EUV. Net income of €5.0 billion included a €510 million gain on its stake in Mistral AI. Customer prepayments rose €5.7 billion in the quarter, the clearest sign of new orders now that ASML no longer reports bookings.
ASML guided to €14.2–15.2 billion of fourth-quarter sales and €44–45 billion for 2026, up 36%, at a 56% gross margin. It plans to raise EUV and DUV capacity by 30% in 2027 and says even that will not meet customer demand in 2027 or 2028; price increases should come through partly in 2027 and fully from 2028. China fell to 23% of machine sales from 42% a year earlier.
| 2023 | 2024 | 2025 | 2026 guidance | |
|---|---|---|---|---|
| Sales | €27.6B | €28.3B | €32.7B | €44–45B |
| In U.S. dollars, at $1.123 | $31.0B | $31.7B | $36.7B | $49–51B |
| Gross margin | 51.3% | 51.3% | 52.8% | about 56% |
| Net income | €7.8B | €7.6B | €9.6B | — |
ASML reports in euros under IFRS, in an annual report filed with the SEC as a 20-F, so the site’s automatic tables do not cover it; these figures come from its results releases. Sales stalled in 2023–2024 as memory makers cut spending and China export rules tightened, then accelerated as AI demand reached every leading-edge customer at once.
At the end of September ASML had €12.7 billion of cash and short-term investments against bonds of roughly €3 billion (an estimate; the latest balance sheet has the exact figure), giving about €9 billion ($10 billion) of net cash. It bought back €4.1 billion of stock in the quarter under a program of up to €12 billion running to 2028, and pays an interim dividend of €1.88 a share in November. Each ADR is one ordinary share; there are about 383 million.
| Assumption | Base case | Basis |
|---|---|---|
| Sales, 2026 | $50.0B | Guidance midpoint, €44.5B at $1.123 |
| Growth, 2027 and 2028 | 22%, then 15% | 30% more capacity plus price; fades to 3% by year 10 |
| Operating margin | 41.5% rising to 44% | Q3 was 44.4%; R&D stays high for High-NA |
| Reinvestment | $1 for every $3 of new sales | New capacity and working capital |
| Discount rate | 11.0% | Beta 1.30, no net debt |
| Terminal growth | 3.0% | With a 30% return on new capital |
| Bear | Base | Bull | |
|---|---|---|---|
| Growth, 2027 / 2028 | 8% / 5% | 22% / 15% | 30% / 20% |
| Long-run operating margin | 36% | 44% | 47% |
| Discount rate | 12.0% | 11.0% | 10.0% |
| Value per share | $524 | $1,081 | $1,653 |
| Probability | 25% | 50% | 25% |
Weighted 25/50/25: $1,085. The bear case is the chip-equipment downturn that usually follows a capacity boom; the bull case is shortage pricing and High-NA adoption lifting margins toward 47%.
| Discount rate | 9.5% | 10.0% | 10.5% | 11.0% | 11.5% |
|---|---|---|---|---|---|
| Value per share | $1,336 | $1,239 | $1,155 | $1,081 | $1,016 |
Every figure in this valuation comes from one model script, rerun and checked against this page each time the site is built. The XLSX model rebuilds it in live formulas: change any blue input and every year’s cash flow, the bridge to the value, the scenarios and the sensitivity table recalculate.
| To justify the price, you need | Against |
|---|---|
| Sales growth of about 26% a year in 2027 and 2028, then the same fade | 22% and 15% |
| Or a long-run operating margin far above anything ASML has earned | 44% |
| Or a discount rate near 9% | 11.0% |
ASML has never been cheap: its monopoly in EUV has earned it a premium for a decade. At about 25 times next year’s expected earnings the shares are pricing in something close to our bull case. The analysts’ average target is about $2,079. The shares fell about 7% today as Lam Research warned that clean-room space and parts will limit the whole chip-equipment industry into 2027.
| Risk | Why it matters |
|---|---|
| The equipment cycle | Chipmakers buy in waves; a pause after the AI build-out would hit orders hard. |
| Supply limits | Its own capacity and its suppliers’ cap how fast sales can grow through 2028. |
| China and export rules | China fell from 42% to 23% of machine sales in a year; new rules could cut more. |
| Customer concentration | TSMC, Samsung, SK Hynix, Micron and Intel buy almost all EUV machines. |
| Currency | Results are in euros; a stronger euro lowers the dollar value of the ADR’s earnings. |
Upside: EUV price increases from 2027, High-NA adoption, memory makers moving more layers to EUV, and a new 2030 target at the June 2027 investor day.
Every leading-edge chip runs through ASML’s machines, and demand is ahead of its capacity for at least two years. The price needs growth close to the model’s bull case.
What would change the value: EUV price increases from 2027, High-NA orders and the June 2027 investor day are the next inputs; a chip-equipment downturn is the main risk.
Ranges, not three cases. The expected value is the average of 4,000 runs of this report’s own model, with every input drawn from a range: the base case is the middle, and the bear and bull cases are the 10th and 90th percentiles. Business inputs move together; the discount rate moves on its own. The 25/50/25 weighting in the valuation section gives $1,085. How the ranges work
Two different questions. The rating is relative: it asks whether the stock is cheaper or dearer than the S&P 500 on the same assumptions. The absolute view asks whether it is worth its price at all: on its own the stock trades above our estimated value, which is 34% below the price.
On the same assumptions every report uses (a 5.15% Treasury yield and a 4.5% equity premium), the S&P 500 itself is worth about 68% of its price. The rating compares each stock with that: Buy if it is at least 15% cheaper than the market on this basis, Sell if at least 15% dearer, Hold in between. It is the same rule for every company, whoever owns it. The rating is the same whether the index is assumed to grow 6% or 10% a year. How ratings work
Against the Street: Analysts average about $2,079, assuming EUV price increases and capacity additions lift growth and margins well into the 2030s. The base case here has growth of 22% then 15% and a 44% margin, discounted at 11%.
The machines are irreplaceable; the shares already assume it.
| What | Figures | Source |
|---|---|---|
| Latest results | €11.7B (Sales, Q3 2026, +55%), 57.5% (Gross margin), €5.0B (Net income), 17 (EUV machines sold) and others | Q3 2026 results; Analysis |
| Price at writing | $1,560.54 (Close, Oct 22, 2026) | Yahoo Finance; the time of the quote is stated beside the price |
| Discount rate inputs | 10-year Treasury 5.15%, equity risk premium 4.5% | Fixed for every report so they can be compared; How ratings work |
| Valuation | Every value, case and sensitivity | This site’s model: XLSX, CSV |
| Checked by hand | Not yet | Reports are added to the audit log as they are revised |
| Input | Bear (10th percentile) | Base (median) | Bull (90th percentile) |
|---|---|---|---|
| Growth, first forecast year | 8.0% | 22.0% | 30.0% |
| Growth, second forecast year | 5.0% | 15.0% | 20.0% |
| Operating margin, near term | 36.0% | 41.5% | 43.0% |
| Operating margin, long run | 36.0% | 44.0% | 47.0% |
| Discount rate | 12.0% | 11.0% | 10.0% |
| Simulation result | |
|---|---|
| Expected value (average of 4,000 runs) | $1,034.40 |
| Likely range, 10th to 90th percentile | $631.82 to $1,430.77 |
| Median | $1,030.43 |
| Chance the value is above the price | 5% |
| Chance it is cheaper than the S&P 500 | 47% |
Each input is drawn from a split normal: its bear and bull values are the 10th and 90th percentiles, so the two sides can differ. Business inputs share a common factor (correlation 0.6); the discount rate moves on its own. Inputs not listed are held at their base value. How the simulation works.