ASML Stock Surges on Raised Outlook and Back-to-Back Price Target Hikes

TLDR

• Freedom Broker upgraded ASML to “buy” and raised its price target to $1,650 from $950
• Q1 revenue hit €8.77 billion, beating consensus by 1.5%, with EPS of €7.15 vs €6.60 expected
• EUV systems made up 66% of system revenue, up from 48% the prior quarter
• ASML raised its full-year 2026 revenue outlook to €36–€40 billion, from €34–€39 billion
• Wells Fargo also raised its price target, to $1,750, keeping an Overweight rating

ASML had a strong first quarter, and Wall Street noticed. Freedom Broker upgraded the chipmaking equipment giant on Thursday, while Wells Fargo lifted its price target the day before.

ASML Holding N.V., ASML

Q1 revenue came in at €8.77 billion, up 13.2% year-on-year. That landed near the top of ASML’s own guidance range and came in 1.5% above what analysts had expected.

Gross margin hit 53%, the high end of the company’s guided 51%–53% range. Diluted EPS was €7.15, beating the €6.60 consensus by 8.3%.

One of the standout numbers was the shift in product mix. EUV systems made up 66% of system revenue in Q1, up from 48% the quarter before. That’s roughly €4.1 billion from EUV alone.

Net system sales were €6.28 billion. Installed base management revenue came in at €2.49 billion, above the €2.37 billion consensus. CFO Roger Dassen said that part of the business came in “a little bit above guidance” with “quite some strong gross margins.”

Orders From Samsung and SK Hynix Drive Momentum

ASML didn’t disclose exact Q1 order intake figures, but Freedom Broker pointed to large commitments already on the books. SK Hynix placed an $8 billion order, and Samsung followed with a $7.4 billion order.

CEO Christophe Fouquet said order intake “continues to be very strong” and that customers have “increased their expected short- and medium-term demand” for ASML’s products.

Geographically, South Korea jumped to 45% of shipments from 22% the prior quarter. China dropped to 19% from 36%. Memory chips accounted for 51% of system sales, up from 30% in Q4, driven by demand for high-bandwidth memory.

For Q2, ASML guided revenue of €8.4–€9 billion. That was slightly below the €9.08 billion consensus, but the company raised its full-year 2026 outlook to €36–€40 billion, up from €34–€39 billion. Full-year gross margin guidance stayed at 51%–53%.

Analyst Upgrades Follow the Numbers

Fouquet said the higher outlook reflects customers moving faster on capacity plans “for 2026 and beyond, supported by long-term agreements.”

Freedom Broker updated its models following the results, now projecting €39.6 billion in revenue and EPS of €32.28 for 2026. For 2027, it sees €46.4 billion in revenue and EPS of €39.35. The new $1,650 price target is based on 36x projected 2027 earnings.

The brokerage said the upgrade reflects higher estimates, sustained demand, and better visibility from multi-year orders and growing installed base revenue.

Wells Fargo moved its own target to $1,750 from $1,650 the day before, keeping its Overweight rating. The firm said it views the market reaction as “overdone” and remains a buyer of ASML. It expects the stock to be driven by improving 2027 visibility, particularly around low-numerical-aperture EUV units, with Wells forecasting over 80 low-NA EUV units shipped that year.

Wells Fargo also pointed to the raised 2026 guidance being driven by non-China demand as a positive factor in its updated view.

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