ASML's Rally Hits a Speed Bump as Geopolitics and China Weakness Cloud the Outlook
Published on 07/08/2026 at 15:44 | Redaktion boerse-global.de
After a blistering first-half run that sent shares up more than 53% from January — and to a record €1,748 in late June — ASML has hit a rough patch. The stock now trades around €1,515, roughly 13% below that all-time high. The catalyst isn't a miss on fundamentals or a sudden drop in chip orders. Instead, a pair of headwinds has emerged: a sharp slowdown in China and a new US legislative threat that could tighten export controls even further.
The China Conundrum
The Dutch lithography giant's reliance on China has shifted dramatically in just a few months. At the end of 2025, 36% of ASML's equipment sales went to the People's Republic. By the first quarter of 2026, that share had collapsed to 19%. Management now expects the full-year China proportion to settle around 20%, down from roughly 33% in 2025. The drop reflects both normalising demand after a post-pandemic surge and the chilling effect of existing US-led export curbs.
That void, however, is being filled elsewhere. South Korea's share of ASML's sales jumped from 22% at end-2025 to 45% in the first quarter. Samsung alone has ordered roughly 20 of the company's most advanced EUV systems as it aggressively expands memory-chip capacity. More than half of ASML's recent shipments have gone into memory production, underscoring the AI-driven boom in high-bandwidth memory and logic chips.
Washington's Wrench
The near-term risk is now as much political as commercial. A bipartisan group of US lawmakers has introduced the MATCH Act, a bill aimed at further restricting technology exports to China. If passed, it would target even ASML's older DUV machines, which are currently not fully blocked. The legislation has not yet been enacted, but the mere debate has injected uncertainty. Separately, the US Commerce Department has paused another set of trade restrictions through November 2026, creating a confusing regulatory patchwork.
Should investors sell immediately? Or is it worth buying Asml?
ODDO BHF analysts describe the situation as a "geopolitical overhang". JPMorgan warns that the worst-case scenario — including potential limits on ASML's lucrative service and maintenance business in China — could shave up to 10% off earnings per share. A more severe outcome would be that China accelerates its own lithography development, permanently shrinking ASML's addressable market.
The Bullish Counterargument
Optimists point to demand that exceeds ASML's manufacturing capacity. The company raised its 2026 revenue guidance to between €36 billion and €40 billion earlier this year, and the order book remains heavy with EUV and non-EUV systems. Samsung's appetite for the latest tools, combined with a broader AI boom spanning satellites, robotics, and data centres, provides a powerful offset to China's retreat.
Analysts at Degroof Petercam estimate that the revenue hit from China could be contained to a low single-digit percentage of total sales. If management confirms that view when second-quarter results are released in mid-July, the current pullback could be seen as an entry point. The stock still trades 32% above its 200-day moving average, leaving some cushion.
The Bear Case: High-NA Delays and Valuation Pressure
On the flip side, ASML faces a technology adoption hiccup. A major customer has reportedly delayed the rollout of the new High-NA EUV systems, citing high costs. Jefferies warns that this could temper expectations for the company's next growth cycle, potentially weighing on its valuation multiple even if underlying earnings hold up.
Asml at a turning point? This analysis reveals what investors need to know now.
Technical indicators show a market caught between forces. The 30-day annualised volatility stands at 64%, and the relative strength index is a neutral 48 — neither oversold nor overbought. Should the Q2 report disappoint on China orders or if the MATCH Act gains traction, the 100-day moving average near €1,332 would come into focus as support. A decisive break below that level could accelerate selling.
Mid-July Spotlights the Next Move
All eyes are now on the July earnings release. The key numbers to watch will be the trajectory of Chinese orders — any sign of further deterioration beyond the 20% full-year guide — and whether ASML maintains its €36-€40 billion revenue target. A solid reaffirmation, backed by strong memory-chip demand from Korea, could propel the stock back toward June's peak. But a cautious tone, combined with fresh headlines from Washington, could deepen the correction. For now, ASML's story remains one of exceptional demand wrestling with extraordinary geopolitical risk.
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