ASML (ASML) Stock Rallies as Analysts Boost Targets Following Strong Q1 and Upgraded 2026 Forecast

Key Highlights

• Freedom Broker elevated ASML to “buy” rating with price target jumping to $1,650 from $950
• First-quarter revenue reached €8.77 billion, surpassing consensus estimates by 1.5%, while EPS of €7.15 exceeded the €6.60 forecast
• EUV systems contributed 66% of total system revenue, a significant increase from the previous quarter’s 48%
• Company elevated its 2026 full-year revenue projection to €36–€40 billion from the prior €34–€39 billion range
• Wells Fargo increased its price target to $1,750 while maintaining an Overweight stance

The semiconductor equipment manufacturer delivered impressive first-quarter results that captured the attention of major financial institutions. Following the earnings release, Freedom Broker issued an upgrade on Thursday, complementing Wells Fargo’s price target adjustment from the previous day.

ASML Holding N.V., ASML

First-quarter revenue totaled €8.77 billion, representing a 13.2% year-over-year increase. The figure positioned itself at the upper end of the company’s projected range and exceeded analyst forecasts by 1.5%.

The company achieved a gross margin of 53%, reaching the maximum of its guided 51%–53% bracket. Diluted earnings per share registered at €7.15, surpassing the consensus estimate of €6.60 by 8.3%.

A particularly notable development was the product composition transformation. EUV systems represented 66% of system revenue during the first quarter, climbing from 48% in the preceding period. This translates to approximately €4.1 billion generated from EUV technology alone.

Net system sales totaled €6.28 billion. Revenue from installed base management reached €2.49 billion, exceeding the €2.37 billion analyst projection. CFO Roger Dassen noted this segment performed “a little bit above guidance” while delivering “quite some strong gross margins.”

Major Orders From Korean Chipmakers Fuel Growth

While ASML opted not to reveal specific first-quarter order intake data, Freedom Broker highlighted substantial commitments already secured. SK Hynix submitted an $8 billion order, with Samsung contributing an additional $7.4 billion commitment.

CEO Christophe Fouquet characterized order intake as “continues to be very strong,” noting that clients have “increased their expected short- and medium-term demand” for the company’s equipment portfolio.

From a regional perspective, South Korea’s share of shipments surged to 45% from the previous quarter’s 22%. Meanwhile, China’s portion declined to 19% from 36%. Memory chip products comprised 51% of system sales, up from Q4’s 30%, propelled by robust demand for high-bandwidth memory solutions.

The company provided second-quarter revenue guidance of €8.4–€9 billion. Although this came in marginally below the €9.08 billion consensus, management elevated its complete 2026 forecast to €36–€40 billion from the earlier €34–€39 billion projection. The full-year gross margin guidance remained unchanged at 51%–53%.

Wall Street Responds with Positive Revisions

Fouquet explained the enhanced outlook stems from customers accelerating capacity expansion plans “for 2026 and beyond, supported by long-term agreements.”

Freedom Broker revised its financial models post-results, now forecasting €39.6 billion in revenue and earnings per share of €32.28 for 2026. Looking ahead to 2027, the firm anticipates €46.4 billion in revenue with EPS reaching €39.35. Their new $1,650 price target applies a 36x multiple to projected 2027 earnings.

The brokerage attributed the upgrade to elevated estimates, persistent demand trends, and enhanced visibility from multi-year customer commitments and expanding installed base revenue streams.

Wells Fargo adjusted its target upward to $1,750 from $1,650 one day earlier, retaining its Overweight rating. The firm characterized the market’s response as “overdone” and maintains a positive stance on ASML. It anticipates the stock will benefit from strengthening 2027 visibility, especially concerning low-numerical-aperture EUV systems, with Wells projecting over 80 low-NA EUV unit shipments that year.

Wells Fargo also emphasized the raised 2026 guidance being fueled by non-China demand as a constructive element in its revised assessment.

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