Technology
71/100
71/100Is ASML-ASML Holding N.V. a buy?
Wednesday 14 October 2026
Why now: Third-quarter results showed record sales, strong profitability and higher full-year expectations, while management said customer demand may exceed planned supply in 2027 and 2028. The shortcoming is the share setup: premarket trading is lower and the stock remains below its 50-day average, but the demand evidence materially strengthens the long-term case.
Upside: The analyst target is $2,330.75, implying 35.7% upside from the latest quoted price of $1,717.76. That outcome requires ASML to convert customer interest through 2028 into actual orders, production capacity and delivered systems.
Risks: The largest risks are a pullback in customer factory spending and tighter export restrictions that limit shipments. The premium valuation leaves little room for delays in demand, production or adoption of next-generation systems.
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Scorecard
Read:Strong metricsSolid metricsSelectiveCautionUnfavourableN/A
| Scorecard | 71/100 | |
|---|---|---|
| Company Detail | ASML - ASML Holding N.V. | |
| Price as at 13 October 2026 | $1,717.76 | |
| Market cap | $662.1B | |
| Quality and Fundamental Score (100) | ||
| Breakout / Early-Momentum /20 | 6/20 | |
| Rev/EPS Momentum /20 | 19/20 | |
| Business Quality /15 | 11/15 | |
| Balance Sheet /15 | 15/15 | |
| Valuation /10 | 4/10 | |
| Industry Relative Strength /10 | 6/10 | |
| Macro / Sector Tailwind /10 | 10/10 | |
| Growth | ||
| Cash runway | Cash generative | |
| Revenue YoY | +15.6% | |
| EPS YoY | +28.4% | |
| FCF YoY | +22.0% | |
| Gross margin | 52.8% | |
| Valuation & Trend | ||
| Trailing P/E | 54.9x | |
| Forward P/E | 44.1x | |
| RSI (14d) | 45 | |
| vs 50d SMA | -1.4% | |
| Support cushion | −5.7% | |
| Sentiment | ||
| Wall Street verdict | Mixed | |
| News tone | Positive | |
| Dividend | 0.5% | |
How are these colored?
| Metric | Strong metrics | Solid metrics | Selective | Caution | Unfavourable |
|---|---|---|---|---|---|
| Overall score | ≥ 80 | 70-79 | 60-69 | 50-59 | < 50 |
| Business quality /15 | ≥ 12 | 10-11 | 8-9 | 6-7 | < 6 |
| Balance sheet /15 | ≥ 12 | 10-11 | 8-9 | 6-7 | < 6 |
| Market cap | ≥ $20B | $5B-$20B | $2B-$5B | $1B-$2B | < $1B |
| Cash runway | ≥ 3 yr or cash generative | 1.5-3 yr | 0.75-1.5 yr | 0.25-0.75 yr | < 0.25 yr |
| Revenue YoY | ≥ 15% | 5-15% | 0-5% | -5-0% | < -5% |
| EPS YoY | ≥ 20% | 5-20% | 0-5% | -5-0% | < -5% |
| FCF YoY | ≥ 10% | 1-10% | 0-1% | -5-0% | < -5% |
| Gross margin | ≥ 60% | 40-60% | 25-40% | 10-25% | < 10% |
| Trailing P/E | < 15 | 15-25 | 25-35 | 35-40 | > 40 or neg |
| Forward P/E | < 15 | 15-25 | 25-35 | 35-40 | > 40 or neg |
| RSI (14d) | 50-70 | 45-50 or 70-75 | 40-45 or 75-78 | 30-40 or 78-80 | < 30 or > 80 |
| vs 50d SMA | +2% to +15% | 0-2% or 15-25% | -2-0% or 25-35% | -3--2% or 35-40% | < -3% or > 40% |
| Support cushion | 2-10% above | 0-2% | 10-15% | 15-20% | price below support |
| Wall Street verdict | Aligned | — | Mixed | — | Disagrees |
| News tone | Positive | — | Neutral / Mixed | — | Negative |
| Dividend | Yield ≥ 2% & growing | Growing | Flat payer ≥ 1% | Low / flat | Cutting |
Detailed Analysis — Wednesday 14 October 2026
What they do
ASML makes the lithography systems, software and services that chipmakers use to print circuits onto silicon wafers. It sells advanced and older-generation systems, then earns recurring service and upgrade revenue from the machines installed in customer factories.
Leadership
Christophe D. FouquetCEO
Christophe D.
Roger J. DassenCFO
Roger J.
Frederic J. Schneider-MaunouryCOO
Frederic J.
Customers & notable contracts
Receiver of capital expenditure: Yes: ASML is a direct receiver of chipmaker capital expenditure because its systems are major purchases required to build and upgrade semiconductor factories.
Main customers
- Taiwan Semiconductor Manufacturing Company (A major advanced-chip foundry customer that uses ASML lithography systems to expand leading-edge manufacturing.)
- Samsung Electronics (A major logic and memory chipmaker using ASML systems for advanced manufacturing.)
- Intel (A major logic-chip customer and an early user of ASML's next-generation high numerical aperture extreme ultraviolet systems.)
Notable contracts
- Intel Foundry high numerical aperture extreme ultraviolet collaboration (Announced in September 2026 to accelerate industry readiness for next-generation chip manufacturing.)
- Samsung Electronics next-generation semiconductor manufacturing collaboration (Expanded strategic collaboration announced in September 2026.)
- Taiwan Semiconductor Manufacturing Company large-format photomask initiative (Joint initiative announced in September 2026 for high numerical aperture extreme ultraviolet manufacturing.)
Summary thesis
- ASML occupies a uniquely important position in advanced semiconductor manufacturing because chipmakers depend on its lithography tools to make leading-edge chips.
- Its installed base also creates a growing service and upgrade business that supports earnings between major system deliveries.
- The latest results indicate that artificial-intelligence-related factory investment is moving from a distant narrative into stronger customer demand and capacity planning.
Wall Street alignment
Wall Street: Mixed signals (2 pos / 1 neg)
Analyst consensus
Buy (2.47, 45 analysts) · +36% upside
Institutional ownership
20% institutions, insiders 0.0%
Short interest
0.4% of float short · 1.1 d-to-cover
Smart money tape
+0 net (acc 1 / dist 1, last 26d)
Recent news
News Positive · last 7d
Show 3 headlines from the last 7d
2026-10-14Earnings+supportive
ASML reported third-quarter net sales of 11.7 billion euros, gross margin of 57.5 percent, and net income of 5.0 billion euros. It forecast fourth-quarter sales of 14.2 billion to 15.2 billion euros and raised the low end of its 2026 sales outlook to 44 billion euros, supported by strong artificial intelligence-related demand.
2026-10-14Guidance+supportive
ASML said customers are increasing equipment-demand forecasts and some have expressed interest in placing orders for 2029 and 2030. The company said its currently planned supply for 2027 and 2028 will not fully meet demand and it is evaluating further capacity expansion.
2026-10-12Other+supportive
TechTimes reported that Samsung Electronics and SK Hynix accepted a 10 percent increase in ASML replacement-parts prices for South Korea, effective for January 2027 deliveries. If implemented as reported, the increase would reinforce ASML's pricing power and support service revenue margins.
Dividends
Yield (fwd)
0.51%
Latest (TTM)
$7.78
2025
$7.37
2024
$6.71
Payout ratio: 27%
Technicals
Price
$1,717.76
RSI (14d)
44.8
50d SMA
$1,742.54
200d SMA
$1,568.53
vs 50d SMA
-1.4%
vs 200d SMA
+9.5%
Support (swing low)
$1,619.34 −5.7%
40-day high (R)
$1,896.35 +10.4%
Next swing high (swing high)
$1,790.00 +4.2%
Close as of 2026-10-13.
Score breakdown
Scores 71 out of 100. a decent overall grade. Balance sheet, sector fit, and earnings trend scored highest. Business quality also helped. Relative strength versus its industry was fair but not a standout driver. Valuation and chart setup weighed on the total. The business quality is exceptional, but the share price is below its 50-day average, volume has not expanded, and the stock remains well below its recent high. The valuation also assumes that the current artificial-intelligence-driven spending cycle and very high profitability continue.
Component scores are on the scorecard above.
Momentum evidence
- The current print is $1,717.76 in premarket trading, down 1.86% from the prior close.
- The completed daily chart is not a leadership setup: the shares are 1.4% below the 50-day average, have not reclaimed it recently enough, are 13.7% below the 52-week high, and volume is below its recent baseline.
- The rising 200-day average and a 7.9% 20-day gain prevent the picture from being outright broken, but this is a base rather than a confirmed advance.
Fundamental evidence
- Figures show $32.67 billion of latest annual revenue, $9.61 billion of net income and $11.08 billion of free cash flow.
- Gross margin was 52.8%, return on invested capital was 36.9%, and net debt to earnings before interest, taxes, depreciation and amortization was negative, indicating net cash.
- The October 14 quarterly release also reported record third-quarter sales and profit, but the key red flag is cyclicality: a small group of very large chipmakers can postpone expensive factory tools when their own demand or financing conditions change.
Cash runway: Cash generative (latest annual free cash flow is positive).
Valuation view
At 54.9 times trailing earnings, 44.1 times forward earnings and 57.8 times free cash flow, ASML is priced for continued growth rather than for a normal semiconductor-equipment downturn. The valuation is supported by high returns, scarce technology and a strong competitive position, but it is demanding even relative to high-quality semiconductor equipment peers. The 1.7% free-cash-flow yield is the clearest sign that the market already expects substantial future earnings expansion.
Macro tailwind
Artificial-intelligence computing requires more advanced chips and more manufacturing capacity, which increases demand for the lithography intensity that ASML supplies. Customer interest in orders extending into 2029 and 2030 shows that this theme is affecting long-range factory planning, not only current chip sales.
What to watch
Upcoming (1–6 months)
- Management's October 14 investor call and any additional detail on 2027 demand, bookings and capacity expansion.
Ongoing
- Customer factory spending plans, shipment permissions under export rules, and progress in lifting output capacity for 2028.
Long-term case
ASML's long-term advantage rests on decades of engineering, supplier relationships and customer integration that are difficult to reproduce. As leading chips require ever more precise manufacturing, customers should need more advanced lithography, productivity upgrades and service support. The central multi-year question is whether high numerical aperture extreme ultraviolet systems become broadly adopted on customer roadmaps rather than remaining concentrated among a small number of early users.
Risks & invalidation
Risks
- Concentrated customer spending could fall sharply if leading foundries or memory producers slow factory expansion.
- New export controls, license limits or geopolitical disruption could reduce accessible demand or delay deliveries.
Breaks the thesis
- A sustained failure to convert the stated 2027 and 2028 demand visibility into orders, system deliveries and high margins would weaken the growth case.
- Technically, a confirmed breakout that then loses the 50-day average on persistent weakness would show that the market has rejected the improving business evidence.
Bottom line
ASML is a rare strategic supplier to the world's leading chipmakers, with unusually strong margins, cash generation and a technology position that is difficult to challenge. The October results reinforce the case that artificial-intelligence factory spending can support growth well beyond the current year, although the stock price still reflects high expectations and the chart has not confirmed the improving fundamentals. The main swing factor is whether customer capacity plans become real orders and deliveries without being disrupted by export rules or a semiconductor spending slowdown.