ASML presents investors with a mixed bag despite upgrade Proactive uses images sourced from Shutterstock
UBS’s prediction of a muted share price reaction to ASML Holding NV’s (NASDAQ:ASML, XETRA:ASME) first-quarter results proved prescient, with the stock trading sideways after the numbers fell broadly in line with buy-side expectations.
That said, the Dutch semiconductor equipment maker’s upgraded full-year guidance should drive modest upward revisions to consensus forecasts, the Swiss bank noted.
ASML reported first-quarter net sales of €8.77 billion on Wednesday, 1% ahead of consensus, with first-quarter earnings before interest and tax coming in 4% above expectations at €3.16 billion, supported by a gross margin of 53% against the 52.2% the market had anticipated.
The standout line within the quarter was EUV system sales, which came in 30% above consensus at €4.1 billion and grew 29% year on year, underscoring the strength of demand for ASML’s most advanced lithography tools from chipmakers investing in artificial intelligence infrastructure.
China remained a source of complexity, with system sales falling 56% quarter on quarter and 23% year on year in the first quarter, representing 19% of product sales.
UBS noted this is consistent with import data and said ASML’s own assumption that China normalises to 20% of annual sales, implying a 20% year-on-year decline.
This remains highly conservative against the broker’s own forecast of a 1% decline and its projection of 10% growth in Chinese wafer fabrication equipment spending overall.
For the second quarter, ASML guided net sales of between €8.4 billion and €9.0 billion with gross margin of 51-52%, implying a 4% miss to current second-quarter consensus at the midpoint.
The full-year 2026 revenue guidance was raised to between €36 billion and €40 billion, from a prior range of €34 billion to €39 billion, driven primarily by a recovery in the non-EUV immersion business, which ASML now expects to match 2025 revenues after previously guiding flat.
UBS, which carries a ‘buy’ rating and €1,500 price target on the stock, said the new guidance midpoint implies low single-digit percentage upgrades to full-year consensus earnings estimates.
In afternoon trading, stock in Europe’s largest company was up 0.7% at €1,292.60.