ASML's Bullish Wall Street Chorus Faces a Test From Shanghai
Published on 08/05/2026 at 14:04 | Redaktion boerse-global.de
The Dutch lithography giant is getting a double dose of analyst enthusiasm this week, even as a new competitive threat emerges from China. The result: a stock that's climbing steadily but still sits well below its summer peak.
ASML shares have gained roughly 9 percent over the past seven sessions, with the latest leg higher coming after Bernstein named the company one of its top ideas for the third quarter of 2026. The bank reaffirmed its "Outperform" rating and set a price target of €2,500 — a level that implies substantial upside from current trading levels around €1,473.
Wall Street's Conviction Grows
Goldman Sachs has also thrown its weight behind the stock, adding ASML to its European Conviction List. Analyst Alex Duval points to improving visibility on the company's capacity plans, with strong order intake across both the logic and DRAM memory segments. He expects earnings-per-share estimates for 2027 through 2029 to beat the current market consensus by 5 to 18 percent.
The margin story is central to both banks' bullishness. Goldman projects ASML's profit margin will expand from roughly 41 percent in fiscal 2026 to around 50 percent by 2029, driven by pricing power, operating leverage, and a shift toward more expensive machine platforms. Bernstein's thesis echoes that view: the market is underestimating both the company's pricing muscle and its margin potential.
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Part of that optimism stems from rising lithography intensity. As DRAM production increasingly shifts to more advanced EUV layers, the metric is climbing from 20 percent toward nearly 30 percent — and each additional layer translates into more demand for ASML's machines.
The Shanghai Factor
The bullish narrative hasn't been without turbulence. Late July brought news that a state-backed company in Shanghai had begun series production of its own immersion DUV lithography machines — the first credible Chinese alternative to ASML systems in the domestic semiconductor market. The announcement initially weighed on the stock.
Bernstein, however, argues the threat is overstated. China accounted for just 16 percent of ASML's revenue in the first half of 2026, roughly €2.9 billion over six months — a sharp drop from the 36 percent share of net system sales China represented in the fourth quarter of 2025. CFO Roger Dassen expects China to contribute around 20 percent of full-year revenue as demand picks up in the second half. The bank also characterizes the Chinese technology as years behind ASML's capabilities.
A Booked-Out Future
The real driver of the recent rally sits in the order book. ASML's manufacturing capacity for the next-generation EUV systems is essentially fully booked through the end of 2027. In the Low-NA EUV segment, the company is nearly sold out for 2027, with capacity expanding about 30 percent from roughly 65 systems currently — and a further increase for 2028 is already under review.
Supply chain confidence gets a boost from Zeiss, ASML's exclusive optics supplier. The company is expanding its long-term manufacturing capacity, with its Oberkochen facility growing by around 25,000 square meters of production space. The first employees are moving into the completed building this month, four years after the groundbreaking in 2022. Oberkochen and Wetzlar remain the only locations worldwide capable of producing the optical columns for ASML's scanners — a constraint that, according to ASML's annual report, limits how many systems the company can build.
Numbers Back the Optimism
Recent financial results support the positive narrative. In the second quarter, ASML posted net sales of €9.3 billion, beating its own guidance, with net profit of €2.9 billion. Management raised its full-year 2026 revenue forecast to a range of €43 billion to €45 billion.
The company plans to deliver at least 60 EUV lithography systems in 2026, with demand fueled by the ongoing expansion of AI infrastructure.
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Cautious Notes Remain
Not every signal points upward. The transition to High-NA EUV technology is driving up research costs, and ongoing capacity investments across the supply chain could pressure margins in the near term — even as revenue forecasts climb.
The stock's technical position reflects that tension. At current levels, ASML trades 15.73 percent below its record high of €1,748.00 from June 30, 2026, and sits 3.62 percent under its 50-day average of €1,538.98. Yet it maintains a cushion of 21.55 percent above its 200-day average of €1,211.82.
For now, the prospect of expanding margins through 2029 appears to be outweighing both the distance from the summer peak and the emergence of a Shanghai-based competitor. Whether that calculus holds will depend on whether order momentum and easing China concerns continue to trump the twin pressures of new competition and investment-driven margin drag.
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