ASML HOLDING NV (ASML)

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AI: Overvalued

Price checkThe market price leaves little room for slower growth or lower future expectations.

Google Finance recorded ASML at $1,810.07 on August 12, with a $700.3 billion market value and a price equal to 56.95 times trailing earnings. That represents only a 1.8% earnings yield, meaning annual earnings divided by price. My inference is that earning an 8% yearly price return over ten years would require roughly 13–15% annual earnings growth if the ending multiple falls to 30–35 times earnings, before dividends. That demanding assumption supports an Overvalued verdict despite ASML’s exceptional business.

Big pictureGrowth is powerful, but chip spending cycles still make cash flow uneven.

From 2020 through 2025, revenue rose from €14.0 billion to €32.7 billion and diluted earnings per share from €8.48 to €24.71. In 2025, operating cash reached €12.7 billion; subtracting €1.6 billion of capital spending produced about €11.1 billion of free cash flow, meaning cash left after running and investing in the business. However, first-half 2026 operating cash was negative €0.5 billion as receivables and customer-contract balances absorbed cash, although the second quarter alone generated €1.3 billion of free cash flow.

Business strengthMarket leadership, recurring service sales, and net cash support unusually durable earnings.

ASML is the only commercial supplier of extreme-ultraviolet machines required for the most advanced chips. First-half 2026 service and upgrade sales grew 28% to €5.25 billion and supplied 29% of revenue, making earnings less dependent on new-machine deliveries. At December 2025, cash exceeded debt by €9.2 billion. ASML also spent €5.95 billion on 2025 buybacks, while shares fell 7.5% from 2020 to 2025; €202 million of 2025 share-based pay was modest beside repurchases. Another €2.1 billion was repurchased in first-half 2026.

What could change the storyMore machine capacity could lift value, while weaker demand or export limits could cut it.

The strongest bull case is management’s new €43–45 billion 2026 sales range, whose midpoint is 35% above 2025, plus planned 30% capacity additions for leading extreme-ultraviolet and immersion systems in 2027. The bear case is that the price already assumes years of exceptional expansion. First-half China sales fell 22% to €2.88 billion, and further export restrictions could reduce machine and service revenue there. Evidence supporting the price would be sustained double-digit earnings growth after 2027; order delays or weaker cash conversion would challenge it.

$1,810.07 price considered

AI: News

Forecast jumps after beatSecond-quarter results beat expectations, and management sharply raised the full-year sales outlook.

On July 15, ASML reported second-quarter revenue of €9.33 billion and net income of €2.92 billion, above analyst estimates of €8.80 billion and €2.62 billion. Management raised expected 2026 sales to €43–45 billion from €36–40 billion, a 16% increase at the midpoint. Reuters reported Amsterdam shares up 3.7% that morning. The timing supports an association with the results, though broader semiconductor trading may also have influenced the move.

Capacity expansion signalASML committed to much more production, showing confidence that advanced-chip demand will persist.

On July 15, ASML said it would add 30% to its roughly 65-machine 2026 low numerical-aperture extreme-ultraviolet capacity for 2027 and pursue a similar increase for immersion systems. It is investigating another 30% expansion for 2028. Reuters also reported that Intel will use ASML’s newer, more precise High-NA system for Panther Lake chips. These developments expand ASML’s sales ceiling and support technology adoption, but larger capacity would become costly if customer spending weakens.

Record valuation milestoneCapacity optimism pushed the company to a record European valuation, raising expectations and risk.

On June 3, ASML became Europe’s most valuable company on record, reaching approximately €576.5 billion in market value as its Amsterdam shares gained 1.6% to a then-record €1,496. They had risen 61% during 2026 by that date. Reporting linked the enthusiasm to artificial-intelligence chip demand and analyst estimates that ASML could produce more extreme-ultraviolet machines than previously assumed. That attribution is plausible, but the same-day timing does not prove those reports alone caused the rise.

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Free cash flow

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014	2013	2012	2011	2010	2009	2008	2007
Revenue	€32.67B	€28.26B	€27.56B	€21.17B	€18.61B	€13.98B	€11.82B	€10.94B	€8.96B	€6.88B	€6.29B	€5.86B	€5.25B	€4.73B	€5.65B	€4.51B	€1.60B	€2.95B	€3.77B
Gross profit	€17.26B	€14.49B	€14.14B	€10.70B	€9.81B	€6.80B	€5.28B	€5.03B	€4.02B	€3.15B	€2.90B	€2.60B	€2.18B	€2.01B	€2.45B	€1.96B	€458.4M	€1.02B	€1.55B
Research & development	€4.70B	€4.30B	€3.98B	€3.25B	€2.55B	€2.20B	€1.97B	€1.58B	€1.26B	—	—	€1.07B	€882.0M	€589.2M	€590.3M	€523.4M	€466.8M	€516.1M	€486.1M
Operating income	€11.30B	€9.02B	€9.04B	€6.50B	€6.75B	€4.05B	€2.79B	€2.97B	€2.44B	€1.76B	€1.57B	€1.28B	€1.05B	€1.16B	€1.64B	€1.25B	−€163.1M	€289.2M	€814.7M
EBITDAderived	€12.33B	€9.94B	€9.78B	€7.08B	€7.22B	€4.54B	€3.24B	€3.39B	€2.86B	€2.12B	€1.86B	€1.54B	€1.28B	€1.34B	€1.81B	€1.40B	−€21.5M	€410.6M	€941.0M
Net income	€9.61B	€7.57B	€7.84B	€5.62B	€5.88B	€3.55B	€2.59B	€2.59B	€2.07B	€1.56B	€1.39B	€1.20B	€1.02B	€1.15B	€1.47B	€1.02B	−€150.9M	€322.4M	€671.0M
Basic EPSper diluted share	€24.73	€19.25	€19.91	€14.14	€14.36	€8.49	€6.16	€6.10	€4.81	€3.66	€3.22	€2.74	€2.36	€2.70	€3.45	€2.35	-€0.35	€0.75	€1.45
Diluted EPSper diluted share	€24.71	€19.24	€19.89	€14.13	€14.34	€8.48	€6.15	€6.08	€4.79	€3.64	€3.21	€2.72	€2.34	€2.68	€3.42	€2.33	-€0.35	€0.74	€1.41

Review source filings at SEC.gov ↗

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys0$0.00 disclosed value

Sells (SEC code S)0$0.00 disclosed value

No insider transactions transactions were reported in the stored SEC coverage.

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ASML HOLDING NV (ASML)

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