Is ASML Stock Still Worth Buying After Its Massive Rally?

TLDR

• ASML trades around $1,841 with a 52-week range of $683.48 to $1,959.04, and carries a market cap of $724 billion
• Its backlog remains massive as chipmakers must book EUV systems years in advance, locking in future revenue
• Installed base revenue hit €2.49 billion in Q1 2026, up from €2.13 billion the prior quarter
• Full-year 2026 net sales guidance was raised to €36–€40 billion, with EPS expected to grow 33% next year
• Wall Street consensus is Moderate Buy with an average price target of $1,772.62; BofA reiterated Buy and raised its target

ASML opened Friday at $1,841.18. That’s well off its 52-week low of $683.48, and closing in on the high of $1,959.04. After a run like that, the question writes itself: is there anything left in the tank?

ASML Holding N.V., ASML

The valuation isn’t cheap. ASML currently trades at about 49.9x this year’s expected EPS of just under $36. That sits well above its historical average multiple in the mid-30s. For most companies, that would be a red flag.

But ASML isn’t most companies.

It holds what is effectively a global monopoly on Extreme Ultraviolet lithography systems — the machines that make advanced chips possible. You cannot build 2-nanometer chips without them. There is no alternative vendor.

Each system costs over $350 million and takes months to assemble, calibrate, and ship. Clients don’t just place orders — they book production slots years out. That’s not a sales pipeline. That’s a structural lock-in.

Backlog and Installed Base Carry the Story

Q1 2026 net sales came in at €8.77 billion, down from €9.72 billion in Q4 2025. On the surface, that looks like a slowdown. It isn’t.

Revenue timing at ASML is driven by shipment schedules, not demand. Every system the company can produce is spoken for. The sequential dip reflects manufacturing capacity, not customer interest.

What’s more telling is the installed base management line. That revenue stream — servicing and upgrading systems already in the field — hit €2.49 billion in Q1, up from €2.13 billion the previous quarter. It’s predictable, high-margin, and growing.

Management raised full-year 2026 guidance to a net sales range of €36 billion to €40 billion. The second half is expected to be stronger, driven by accelerating system shipments.

TSMC, Intel, and Samsung are all scaling up new fabs to meet AI infrastructure demand. Those fabs need ASML’s hardware. Hyperscaler capital expenditure is projected to nearly double from $427 billion in 2025 to over $860 billion by 2027.

Margin Expansion Is the Next Catalyst

EPS consensus estimates point to 33% growth next year. That’s the number bulls are anchored to.

The path there runs through margin expansion. ASML is transitioning from low-volume, early-stage manufacturing of its newest systems — including the high-margin High-NA EUV platform and the NXE:3800 series — toward standardized, higher-volume production. Fixed costs get spread over more units. Gross margins should climb toward management’s 2030 target of 56%–60%.

There is one meaningful risk. China still accounts for around 19% of ASML’s sales, and export restrictions remain a live issue. Dutch officials are reportedly lobbying Washington against tighter curbs on equipment sales to China. Any escalation there could pressure revenue.

Decker Retirement Planning recently took a new $4.23 million position in ASML. Dimensional Fund Advisors holds over 990,000 units. Institutional ownership sits at 26.07%.

Goldman Sachs, Citigroup, Morgan Stanley, and Deutsche Bank all carry Buy or equivalent ratings. BofA raised its price target citing higher earnings estimates for 2027 and 2028.

The consensus average target is $1,772.62, though a separate analyst group pegs it at $2,019 — implying roughly 12.5% upside from current levels.

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