ASML Shares Plummet Amid Uncertainty Over 2026 Growth Outlook

ASML Holdings shares have fallen 30% in the past year after the company warned of an uncertain growth outlook for 2026. Despite strong Q2 results, with revenue jumping 23% to €7.7bn and equipment sales up 18% YoY, the company's Q3 guidance fell short of analyst expectations. The company's growth is driven by AI and a shift toward EUV technology, but the direct and indirect impact of tariffs remains uncertain.

ASML Holdings (NASDAQ: ASML) shares have fallen 30% in the past year following the company's warning about an uncertain growth outlook for 2026. Despite strong Q2 results, with revenue jumping 23% to €7.7 billion and equipment sales up 18% year-over-year (YoY), the company's Q3 guidance fell short of analyst expectations. ASML's growth is driven by artificial intelligence (AI) and a shift towards extreme ultraviolet (EUV) technology, but the direct and indirect impact of tariffs remains uncertain.

ASML's Q2 results were robust, with net sales reaching €7.7 billion, marking a 23% YoY increase [1]. The company's gross margin stood at 53.7%, which exceeded expectations, driven by a thriving upgrade business and cost-saving one-offs. Net income for the quarter was €2.3 billion, with earnings per share (EPS) at €5.90. Quarterly net bookings totaled €5.5 billion, with €2.3 billion attributed to EUV systems, reflecting strong demand in the semiconductor industry. The company's CEO, Christophe Fouquet, highlighted progress in lithography intensity, particularly in DRAM, and the introduction of the TWINSCAN NXE:3800E system, which contributed to the quarter's momentum [2].

Looking ahead, ASML expects third-quarter total net sales between €7.4 billion and €7.9 billion, with a gross margin ranging from 50% to 52%. The company anticipates research and development (R&D) expenses of around €1.2 billion and selling, general, and administrative (SG&A) costs of approximately €310 million for the quarter. For the full year 2025, ASML projects a 15% increase in total net sales, with a projected gross margin of around 52% [1].

Despite the positive performance, ASML's share price dropped by 7% following the announcement. However, the company remains optimistic about its growth prospects for 2025 and reaffirms its targets. Analysts forecast a 19.71% potential upside for ASML, while GuruFocus estimates a 57.55% potential upside. ASML holds a consensus "Outperform" rating with an average one-year price target of $879.40 [2].

The company's CEO, Christophe Fouquet, acknowledged increasing uncertainty due to macroeconomic and geopolitical developments, particularly regarding tariffs, which could impact the semiconductor supply chain. However, he expressed confidence in the company's AI customers' fundamentals, which are expected to drive growth in 2025 and 2026 [3].

ASML's strong performance in Q2 underscores its leadership position in the semiconductor industry and its ability to navigate the challenges posed by geopolitical uncertainties and tariffs. The company's focus on EUV technology and AI-driven growth strategies position it well for future opportunities.

References:
[1] https://www.asml.com/en/news/press-releases/2025/q2-2025-financial-results
[2] https://www.gurufocus.com/news/2980099/asml-posts-strong-q2-revenue-as-new-systems-boost-momentum-asml-stock-news
[3] https://www.ainvest.com/news/asml-uncertain-future-implications-tech-industry-2507/