ASML Holding NV: 2026 Growth Concerns and Hedge Fund Activity

ASML Holding NV's Q2 earnings were driven by demand for AI chips, but the company's cautious outlook for 2026 growth has sparked concerns about its stock price. Despite being a leader in advanced lithography technology, the drop in stock price has led to a mix of optimism and unease among investors. Some see it as a strategic entry point, while others caution about geopolitical risks and industry cyclicality.

ASML Holding NV reported strong Q2 earnings driven by robust demand for AI chips, but the company's cautious outlook for 2026 growth has sparked concerns about its stock price. Despite being a leader in advanced lithography technology, the drop in stock price has led to a mix of optimism and unease among investors. Some see it as a strategic entry point, while others caution about geopolitical risks and industry cyclicality.

Q2 Financial Performance

ASML Holding NV's Q2 total net sales came in at €7.7 billion, exceeding expectations and at the top end of the company's guidance. The gross margin was 53.7%, above guidance, primarily driven by higher upgrade business and one-offs resulting in lower costs. Quarterly net bookings in Q2 were €5.5 billion, of which €2.3 billion was from EUV technology. The company expects Q3 2025 total net sales between €7.4 billion and €7.9 billion, with a gross margin between 50% and 52% [1].

Outlook and Challenges

The company expects a full-year 2025 total net sales increase of around 15% relative to 2024, with a gross margin of around 52%. However, ASML acknowledged increasing uncertainty driven by macroeconomic and geopolitical developments, which may impact its growth prospects in the short term. The company's Q3 guidance calling for revenue of between €7.4 billion and €7.9 billion was below the analyst consensus of €8.3 billion [1].

Analyst Perspective

Evercore ISI analyst Mark Lipacis sees the current dip in ASML Holding shares as a buying opportunity. Despite a cautious outlook, Lipacis believes the valuation has compressed significantly, and demand for AI-related chips will support long-term growth. The company beat Q2 revenue and earnings expectations but missed Q3 estimates. Lipacis expects ASML to hit its 2025 goals and is confident in its long-term potential [2].

Investor Sentiment

Analysts have a Moderate Buy consensus rating, with an average price target of $877.75, implying a 17.3% upside potential. Institutions own less than 50% of the stock but are buying on balance while analyst sentiment remains firm [2]. Despite the recent dip, investors should closely monitor the company's guidance and any updates on macroeconomic and geopolitical developments that may impact its growth prospects.

Conclusion

While ASML Holding NV's Q2 results were strong, investors were clearly disappointed with the company's commentary about 2026. The semiconductor equipment business is notoriously lumpy, with a few large foundries making up the bulk of its EUV business. The company continues to expect strong demand coming from AI, but the current macroeconomic and geopolitical environment remains uncertain. Should investors buy the dip? While the recent dip presents a potential opportunity, investors should carefully consider the risks and uncertainties surrounding ASML's growth prospects in the coming years.

References:

[1] https://www.asml.com/en/news/press-releases/2025/q2-2025-financial-results
[2] https://www.ainvest.com/news/evercore-analyst-sees-opportunity-asml-q2-2507/