ASML’s Production Gamble: Can the Chip-Tool Giant Deliver on Its €45 Billion Promise?
Published on 07/22/2026 at 02:51 | Redaktion boerse-global.de
ASML’s stock has been on a rollercoaster, but the Dutch lithography giant is betting big that it can ride the wave of artificial-intelligence demand all the way to a record €45 billion in annual revenue by 2026. The company’s revised guidance, up sharply from a prior range of €36 billion to €40 billion, reflects a conviction that the semiconductor industry’s appetite for its cutting-edge machines is far from sated.
The immediate catalyst was a stellar second quarter. ASML posted net sales of €9.3 billion and net profit of €2.9 billion, both comfortably ahead of analyst estimates. But the real story lies in what those numbers signal about the years ahead. Customers, led by heavyweights like TSMC, are accelerating their capital expenditure plans, placing deposits to lock in delivery slots for ASML’s advanced lithography systems. The order backlog is swelling, and management reports markedly better visibility into 2027 and 2028.
To meet that demand, ASML is planning a 30% capacity expansion for its EUV and DUV immersion systems starting in 2027, with a second phase for 2028 under evaluation. The target is to boost production of low-NA EUV tools from the current 65 units to somewhere between 85 and 110 machines by 2027-2028. Market observers have long identified this specific segment as the critical bottleneck holding back the global AI infrastructure buildout.
Intel’s High-NA Bet Adds Credibility
Should investors sell immediately? Or is it worth buying Asml?
While the capacity expansion addresses volume, a separate technology milestone is bolstering confidence in ASML’s most expensive product line. Intel Foundry has begun using ASML’s new High-NA EUV machines for mass production of its Panther Lake processors, built on the 18A manufacturing process. This is a pivotal moment: critics had questioned the commercial viability of High-NA, given its hefty price tag. TSMC remains on the sidelines, citing costs, making Intel’s endorsement the first concrete proof that the technology can work at scale.
Intel’s upcoming quarterly results on July 23 will be closely watched. A strong outlook from the US chipmaker would not only validate the High-NA investment but also reinforce confidence in ASML’s order book. The two companies are collaborating on the 18A process, which Intel hopes will help it close the gap with AMD in the server market.
A Bumpy Ride, Then a Rebound
The stock’s recent trajectory has been anything but smooth. After ASML’s upbeat July 15 report, shares actually fell about 3% over the following two days, even as the broader PHLX semiconductor index dropped 8%. Investors appeared to wrestle with valuation concerns amid sector-wide jitters. But the recovery came swiftly: on Tuesday, ASML shares jumped 4.67% to €1,599.00, decisively clearing the 50-day moving average of €1,515.02. The primary article recorded a more modest 3.52% gain to €1,581.40, reflecting minor differences in reporting periods.
Even after the bounce, the stock remains 8.52% below its 52-week high of €1,748.00 set on June 30. Yet the year-to-date performance is eye-popping: shares have surged 73.52%, far outpacing the broader European technology sector.
Analysts Turn Bullish on Margin Inflection
The earnings and outlook have prompted a flurry of analyst upgrades. Deutsche Bank lifted its price target to €2,150, citing an inflection point in gross margins, which are expected to climb to 56% in the second half of 2026. Citi raised its target to €2,200, while Berenberg moved to €2,100, noting that ASML’s gross margin guidance of 54-56% comfortably exceeds market expectations of 52.5%. Morgan Stanley set a target of €1,930, and the DZ Bank upgraded the stock from “Hold” to “Buy.” Morningstar, meanwhile, increased its fair value estimate to €1,800.
The China Question and Security Risks
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Amid the growth story, a shift in geographic revenue mix is underway. Tighter export controls and normalizing domestic demand mean ASML expects China to account for only about 20% of total revenue in 2026, down from roughly 33% in 2025. Adding a layer of complexity, a July 20 study from The Hague Centre for Strategic Studies (HCSS) rated the Dutch semiconductor sector as facing “very high risk” of foreign influence, specifically citing espionage threats. The report recommends stricter personnel screening and a public-private fund to replace risky foreign hardware at sensitive sites.
The Capacity Conundrum
The fundamental question hanging over ASML has shifted from whether demand will materialize to whether the company can produce enough machines to satisfy it. CEO Christophe Fouquet described order intake as exceptionally strong, with chipmakers accelerating their capacity plans to meet AI-driven demand for advanced logic and memory chips. Matt Britzman, senior equity analyst at Hargreaves Lansdown, noted that customers are even upgrading and servicing existing tools more intensively—a sign that fabs are squeezing every last drop from current capacity while preparing for the next investment wave.
The first phase of ASML’s capacity expansion for 2027 is locked in. A decision on the second phase for 2028 is pending further review. For now, the market is betting that ASML can execute. The next major test comes on July 23, when Intel’s quarterly report will either confirm the High-NA thesis or raise new doubts. Either way, ASML’s central role in the AI infrastructure buildout is no longer in dispute—only the speed at which it can deliver.
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