Should You Buy ASML Before the Key Earnings Release on Jan. 28?

The semiconductor industry remains a cornerstone of global technological progress, and ASML Holding NV (ASML) sits at its epicenter as the dominant supplier of extreme ultraviolet (EUV) lithography systems. With the company's Q4 2025 earnings report scheduled for January 28, 2026, investors face a critical decision: Is this the optimal moment to enter a position in ASML, or does the stock's valuation and momentum suggest caution? To answer this, we must dissect the interplay of valuation metrics, technical indicators, and forward-looking catalysts.

Valuation: A Premium Justified by Growth?

ASML's current valuation metrics appear elevated relative to historical and industry benchmarks. The company's EV/EBITDA ratio stands at 28.36 as of January 2, 2026, which is 18.74% higher than its 12-month average of 23.88 but significantly lower than its five-year average of 34.2x. This suggests a moderation in multiples compared to past peaks, though it remains well above the semiconductor industry's average EV/EBITDA of 4.5x. Such a disparity reflects ASML's unique role in enabling advanced chip manufacturing, particularly for AI and high-performance computing.

The Price-to-Book (P/B) ratio further underscores this premium. ASML's P/B of 18.93 as of December 1, 2025, far exceeds the industry average of 11.12. While this may seem excessive, it aligns with the company's robust balance sheet and its leadership in EUV technology, which underpins long-term growth. However, the P/B ratio's historical volatility-from a low of 3.66 to a high of 29.26 over 13 years-highlights the cyclical nature of semiconductor valuations. Investors must weigh whether ASML's current premium is sustainable given macroeconomic headwinds, such as potential slowdowns in China's demand for chips.

Momentum: Overbought or Overdue for a Rally?

Technical indicators paint a mixed picture. ASML's stock price closed at $1,167.66 on January 2, 2026, having broken through the $1,140 resistance level. Key support is identified at $1,150, while resistance now sits at $1,200. The 14-day RSI of 79.274 signals an overbought condition, a classic warning sign of potential short-term volatility. However, broader trends remain bullish: short-term moving averages are above long-term averages, and the MACD indicator remains in positive territory.

Options market activity reinforces this optimism. Call dollar volume significantly outpaces put volume, suggesting strong conviction in upward price movement. Yet, the RSI's overbought status implies caution. A pullback before the earnings release could create a more attractive entry point for long-term investors, particularly if fundamentals remain intact.

Earnings Catalysts: Guidance and Beyond

ASML's Q4 2025 earnings report on January 28 will be pivotal. Management has hinted at 2026 sales exceeding 2025's projected €30–35 billion range, driven by EUV and services growth. However, the extent of this growth remains uncertain, as Logic and Memory segments face headwinds from China's market dynamics. The report will likely clarify whether ASML's 10% growth target for EUV and services is achievable and whether the company can offset declines in other regions.

Beyond earnings, investors should monitor external catalysts. For instance, Intel's progress in securing external customers for its foundry business or faster adoption of high-numeric aperture (high-NA) EUV tools could trigger a rerating of ASML's stock. These developments, while speculative, highlight the company's exposure to broader industry trends.

Strategic Entry Timing: Balancing Risk and Reward

The decision to buy ASML before its January 28 earnings hinges on three factors:
1. Valuation: While ASML's multiples are elevated, they are not at historical extremes. The EV/EBITDA of 28.36 is a 23% discount to its five-year average, suggesting some margin of safety for long-term investors.
2. Momentum: The overbought RSI and recent breakout indicate a stock in motion, but short-term volatility is likely. A pullback to the $1,150 support level could offer a more favorable entry.
3. Catalysts: The earnings report will provide critical clarity on 2026 guidance. If management confirms robust EUV demand and navigates China's challenges effectively, the stock could rally further. Conversely, weaker-than-expected guidance may trigger a correction.

Conclusion: A Calculated Bet

ASML's strategic position in the semiconductor value chain remains unassailable, but its valuation and momentum metrics demand careful scrutiny. For investors with a medium-term horizon and risk tolerance for volatility, the current price offers a compelling opportunity, particularly if the stock corrects ahead of the earnings release. However, those prioritizing downside protection may prefer to wait for post-earnings clarity. In either case, ASML's ability to capitalize on AI-driven demand and technological innovation will be the ultimate determinant of its trajectory.