ASML's Installed Base Business Gains Traction: What's Ahead?

ASML Holding’s ASML upgrade and service business has been a strong contributor to its Installed Base Management (IBM) segment throughout the past year. In 2025, ASML’s IBM sales increased 26% to EUR 8.2 billion, driven by higher service and upgrades of its wafer fabrication equipment business.

In the first half of 2025, ASML’s IBM strength was more upgrade-driven and in the second half of 2025, toward recurring service revenues. ASML made strong progress in completing a growing number of field upgrades of NXE:3800E systems with a 220-wafers-per-hour configuration.

ASML Holding’s expanding Extreme Ultraviolet (EUV) Lithography installed base is increasingly driving service demand. The company is moving into sub-2nm production with High Numerical Aperture (High-NA) EUV systems, ensuring further growth. Given these factors, the IBM business is expected to contribute to a quarter of the top line for ASML.

For the first quarter of 2026, ASML expects its IBM sales to be around EUR 2.4 billion, mainly driven by the growing installed base of EUV systems and ASML’s customers' plans to upgrade the performance to support the scaling of their capacity. The Zacks Consensus Estimate for ASML’s 2026 revenues indicates growth of 20% year over year.

How Competitors Fare Against ASML

ASML Holding is effectively the sole player in lithography system upgrades for its own installed base, especially in EUV space. However, in the broader semiconductor equipment market, ASML competes with companies like Lam Research LRCX and Applied Materials AMAT.

Lam Research is an established wafer fabrication equipment manufacturer that is established in the memory space. Lam Research’s memory segment, accounting for both Dynamic Random Access Memory and Non-Volatile Memory divisions, is gaining traction on the back of AI.

Applied Materials supplies equipment used in chip fabrication, including deposition and etching tools that are essential for both advanced and mature nodes. As chips become more complex with AI and high-performance workloads, Applied Materials’ tools aid in designing and making efficient and smaller node chips.

ASML’s Price Performance, Valuation and Estimates

Shares of ASML have surged 119% in the past 12 months compared with the Zacks Computer and Technology sector’s growth of 52.4%.

ASML 12-Month Performance Chart

Image Source: Zacks Investment Research

From a valuation standpoint, ASML trades at a forward price-to-sales ratio of 11.12X, higher than the sector’s average of 5.18X.

ASML Forward 12 Month (P/S) Valuation Chart

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for ASML’s 2026 and 2027 earnings implies year-over-year growth of 20% and 23%, respectively. The consensus estimate for fiscal 2026 has been revised downward in the past seven days.

Image Source: Zacks Investment Research

ASML currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

5 Stocks Set to Double

Each was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They include

Stock #1: A Disruptive Force with Notable Growth and Resilience

Stock #2: Bullish Signs Signaling to Buy the Dip

Stock #3: One of the Most Compelling Investments in the Market

Stock #4: Leader In a Red-Hot Industry Poised for Growth

Stock #5: Modern Omni-Channel Platform Coiled to Spring

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.

See Our Newest 5 Stocks Set to Double Picks >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

ASML Holding N.V. (ASML): Free Stock Analysis Report

Lam Research Corporation (LRCX): Free Stock Analysis Report

Applied Materials, Inc. (AMAT): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research