ASML’s Record Week Ends in a Tumble: Broadcom’s Miss and Rate Fears Overshadow EUV Optimism

After a blistering run that briefly crowned it Europe’s most valuable company, ASML shares hit a wall on Friday. The Dutch lithography giant tumbled nearly 6% to €1,424.80, snapping a six-day winning streak as a one-two punch of disappointing chip-sector news and stronger-than-expected US jobs data rattled investors. Broadcom’s revenue guidance for the third quarter came in at $16 billion, well short of the $17 billion-plus the market had anticipated, casting a pall over the entire semiconductor complex. Meanwhile, the US economy added 172,000 jobs in May, crushing hopes that the Federal Reserve would cut rates anytime soon and sending bond yields higher — a traditional headwind for richly valued tech stocks.

The sell-off marked a sharp reversal from the euphoria that had lifted ASML to a 52-week high of €1,529.80 just three days earlier. At that peak, the company’s market capitalisation briefly exceeded $674 billion, making it the most valuable European equity in history. The shares have more than doubled from their August 2025 low of €593.60 and are up roughly 44% year to date, though some sources put the advance nearer 46%. The rally has been fuelled by strong operational momentum — ASML recently raised its full-year revenue outlook — and by a surge in demand for its extreme ultraviolet (EUV) lithography systems, which are essential for producing the most advanced chips.

Yet even as the stock set records, CEO Christophe Fouquet struck a cautious note on June 5, warning that growing bureaucracy from planned EU oversight of strategic industrial projects could hamper the sector’s agility. That warning coincided with an equally strategic long-term move: ASML signed a letter of intent with Tata Electronics to supply advanced lithography systems for India’s first frontend semiconductor fabrication facility. The agreement covers employee training and supply-chain development, marking the company’s entry into one of the world’s fastest-growing chip markets.

Should investors sell immediately? Or is it worth buying Asml?

Analyst reactions to the stock’s surge have been anything but uniform. J.P. Morgan raised its price target to $2,200 from $1,813 on June 3, keeping an “Overweight” rating, after concluding that ASML has more flexibility in its EUV manufacturing capacity than previously communicated, opening the door to stronger revenue and profit growth. UBS followed by lifting its target to €1,900 from €1,600. BofA Securities also hiked its objective to €1,921, and Barclays set a target of €1,900, both citing rising demand for EUV tools. However, Morningstar and Barclays simultaneously downgraded the stock, arguing that the valuation had become too ambitious after the steep rally.

Next week, ASML could provide fresh catalysts when it hosts a virtual fireside chat with SpaceX founder Elon Musk during its annual technology conference. The discussion is expected to cover artificial intelligence, robotics, space exploration and semiconductor manufacturing, including SpaceX’s “terafab” concept. Investors will be watching closely for any strategic signals that could emerge from the conversation.

Underpinning the long-term bull case is a robust demand pipeline. ASML’s management, led by Fouquet, recently lifted its 2026 revenue forecast to between €36 billion and €40 billion, reflecting accelerated expansion plans by customers. Despite the near-term noise from interest rates and a single earnings miss at Broadcom, the fundamental narrative — that ASML’s EUV machines are indispensable for the next generation of chips — remains intact. The question is whether the stock’s valuation has simply run too far, too fast, or whether Friday’s tumble is merely a healthy pause in a longer ascent.

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