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Semiconductor equipment maker ASML reported first-quarter results last week, topping estimates and raising its full-year revenue outlook. Despite the positive update, the stock fell after the release. As of this writing, ASML shares are still up more than 36% year to date.
ASML’s performance reflects strong demand for advanced semiconductor manufacturing tools. The company is the only supplier with extreme ultraviolet (EUV) lithography technology, which foundries use to produce advanced logic chips, including graphics processing units (GPUs), as well as high-bandwidth memory (HBM).
ASML said it plans to have at least 60 low-NA EUV systems available this year and 80 next year, if demand supports the schedule. Some investors had expected 90 systems next year, a difference that matters because each EUV system can cost more than $300 million.
For the quarter, ASML revenue rose 13% year over year to 8.8 billion euros ($10.4 billion), landing toward the high end of its guidance range of 8.2 billion to 8.9 billion euros ($9.7 billion to $10.5 billion). Equipment sales increased 7% year over year to 6.3 billion euros ($7.4 billion), while service revenue surged 25% to 2.5 billion euros ($2.9 billion).
System deliveries also improved. ASML sold 67 new lithography systems and 12 used systems, compared with 66 new and four used systems a year earlier. The company reported that approximately 66% of sales came from higher-priced EUV technology, versus 46% a year ago. Sales to China were 19% of total, down from 49% a year ago.
Looking ahead, ASML forecast second-quarter revenue of between 8.4 billion euros ($9.9 billion) and 9 billion euros ($10.6 billion). For 2026, the company expects revenue of between 36 billion euros ($42.4 billion) and 40 billion euros ($47.1 billion), up from a prior outlook of 34 billion euros ($40 billion) and 39 billion euros ($45.9 billion).
With the stock trading at nearly 40 times forward P/E, the valuation suggests expectations are already elevated. Still, ASML’s position in the semiconductor supply chain is described as unmatched due to its monopoly on EUV technology required for advanced logic and memory production. The article notes that both logic and memory markets are booming, with demand outpacing supply, supporting the need for more EUV systems.
The piece concludes that investors may not want to chase the stock at current valuation levels, but may consider buying on any material decline.
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