GrowthTurtle
Data Science PhD & IEEE Fellow, Ex-Two Sigma
ASML is cheap against its earnings at 29x next year's, versus the 36x chip-equipment makers usually get. Fair value is $1,883 to $2,397, or 36x next year's $60.08 EPS give or take 12%, leaving the stock 9% below the low end. The read leans on forecasts, with forward earnings 104% above trailing, and is a valuation read only, with no fundamental work. x.com
ASML's roughly 6% drop on China's DUV claim was an overreaction. The report covered five machines against ASML's 130 a year, for older DUV rather than EUV, and did not even name the maker. Key parts, Zeiss lenses, US and Japanese lasers and Japanese photoresist, remain foreign, and it withheld throughput and overlay figures. Similar Chinese claims have repeatedly failed. The real risk is China making 7nm chips on imported ASML tools at 2-3x the cost. x.com
Accelerating earnings mean ASML is not expensive right now. It trades at 24x forward earnings and 19x forward EV/EBITDA. x.com
ASML's earnings beat and higher 2026 guidance suggest its run is not stopping anytime soon. EPS of €12.95 exceeded the €10.60 estimate, and full-year guidance was raised to €44-45B. x.com
ASML is an amazing business, but it is pricey right now. x.com
ASML's sharp profit growth supports its $2,100 stock valuation. Stock Analysis reports quarterly profit rose from €2.0 billion a year earlier to €4.8 billion. The new call is below the earlier $3,000 valuation based on ASML's EUV lithography monopoly. x.com
ASML's planned 2027-28 output cannot meet customer demand, supporting a Buy rating and €1,830 target. Long-term customer down payments rose from €3.6bn to €9.3bn; customers seek 2029-30 orders that ASML has not accepted. Critical-tool price rises begin in 2027, with full effect in 2028, but are not meant to recur annually. Q3 EPS excluding a €509.7m investment gain still beat consensus. x.com x.com x.com x.com x.com
ASML's valuation does not make sense at 45-50x forward earnings unless estimates are too low by around 2x. It has always had pricing power but chosen not to exercise it; that may change, but if it does not, the multiple is hard to justify relative to other opportunities. x.com x.com
ASML's tightened sales guidance raises the floor for its growth outlook as management has become more confident in this year's forecast. Analyst targets imply 35.7% upside from here. x.com
ASML looks undervalued, a rare sight for this company, because its long-term AI opportunity is much bigger than the market is pricing in. AI is driving demand for advanced logic and memory chips, customers are accelerating capacity expansion, and ASML sits right in the middle of that buildout. Q2 revenue reached €9.3B with €2.9B in net income, and management raised its 2026 revenue outlook to €43B-€45B. x.com x.com
ASML is not undervalued at its current valuation of about 46.4 times earnings with a PEG ratio of nearly 3. x.com
ASML is getting paid more for each tool, moving beyond proving it can build enough of them. Q3 2026 brings pricing power and an order book reaching 2030; the house view has strengthened, with high conviction. x.com
