ASML 2Q26 results and guidance were significantly above expectations, and 2028 capacity expansion implies much higher earnings potential than consensus.

Overview

This report is JPMorgan’s quick commentary on ASML’s 2Q26 results. The core thesis is that ASML’s actual 2Q26 performance, 3Q26 guidance and FY26 guidance were all materially above market expectations, with the more important signal coming from management’s discussion of EUV and immersion DUV capacity expansion in 2027 and 2028. JPMorgan believes these capacity signals imply ASML’s 2028 earnings potential is materially above the current market consensus, and that the company’s valuation discount versus U.S. semiconductor equipment peers should narrow.

Core views

JPMorgan believes ASML’s upside drivers come from three areas: first, 2Q26 sales, gross margin, operating profit, and EPS were all above JPMe and consensus; second, 3Q26 and FY26 revenue and gross margin guidance are materially above market expectations, which could drive an upward revision to FY26 consensus earnings of several tens of basis points; third, the 30% capacity expansion guidance for EUV and immersion DUV in 2027-2028 weakens bearish arguments that ASML will be capacity constrained or grow slower than U.S. peers. The report does flag a mild negative that ASML may not reach 90 EUV units in 2027, but argues 2028’s stronger EUV and immersion DUV capacity outlook is sufficient to offset that concern.

Analysis framework

The report applies a framework of actual versus consensus comparison, company guidance versus market expectations, capacity-path modeling, valuation multiple comparison, and peer read-through analysis. JPMorgan combines deviations in 2Q26 revenue, gross margin, operating profit, and EPS versus expectations with ASML’s 2026-2028 EUV and immersion DUV capacity plans to assess 2028 EPS upside and target price support.

Methodology notes

• equity_researchActual vs Expected

  Actual performance versus expectation

  By comparing ASML’s 2Q26 actual revenue, gross margin, operating profit, and EPS to JPMe and Bloomberg consensus, JPMorgan gauges the magnitude of the beat and the potential for upward earnings revisions.

• equity_researchGuidance Revision Analysis

  Company guidance upgrade analysis

  Compares 3Q26 and FY26 revenue, gross margin, and operating profit guidance against market consensus and prior company guidance to assess the direction of future earnings revisions.

• Valuation methodsForward P/E Multiple

  Forward P/E valuation

  The €1,900 target corresponds to 29.4 times JPMorgan’s 2028 EPS, at the lower end of ASML’s historical forward P/E range of 28-38x, reflecting an upside-growth case assumption.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• ASML HOLDING NV / ASML.US

  Primary coverage name; JPMorgan rating is Overweight

  Strengths

  Sole EUV supplier, with lithography market share likely to remain elevated as higher EUV ASPs support pricing; 2Q26 performance and 3Q26/FY26 guidance were both materially above expectations; 2027-2028 EUV and immersion DUV capacity expansion underpins longer-term EPS upgrades.

  Weaknesses

  A minor negative noted is that 2027 EUV capacity may not reach 90 units; valuation multiples remain elevated, making the stock sensitive to earnings upgrades and cycle durability.

  Comparison

  JPMorgan views ASML as significantly undervalued versus U.S. peers, with 2026 growth of roughly 35% outpacing current assumptions for WFE growth, and sees management guiding for roughly 30% growth for the next two years.

  Risks

  Export controls, macro slowdown, EUV adoption below expectations, and continued rate rises that could pressure earnings or valuation multiples.

• Semiconductor capital equipment peers

  ASML’s strong order book and guidance create positive read-through for the sector

  Strengths

  Advanced-node 5/4/3nm expansion, aggressive 2nm ramp, early 1.4nm buildout, and higher DRAM EUV adoption all support equipment demand.

  Weaknesses

  The sector remains exposed to wafer fab capex cycles, geopolitics, and export controls.

  Comparison

  ASML’s 2026 growth and 2027-2028 capacity plans are used by the report to counter the bearish view that ASML growth is weaker than that of U.S. peers.

  Risks

  If WFE growth slows or client expansion pace changes, sector read-through may be weaker than the report expects.

Key data

• 2Q26 Revenue€9.33bn7.2%/5.4% above JPMe/Bloomberg consensus and above the company’s €8.4bn-€9.0bn guidance.
• 2Q26 Net System Sales€6.56bnOne component of 2Q26 company sales.
• 2Q26 Installed Base Management Revenue€2.76bnBeat to revenue was primarily driven by IBM sales being about €300m above expectation.
• 2Q26 Gross Margin54%Above company guidance of 51-52%, and 227bps/201bps above JPMe/consensus.
• 2Q26 Operating Profit€3.46bnOperating margin 37.1%, 15.2%/12.5% above JPMe/consensus.
• 2Q26 Diluted EPS€7.58/share13.7%/10.8% above JPMe/consensus.
• 3Q26 Revenue Guidance€11bn-€12bnMidpoint €11.5bn, 12% above consensus.
• 3Q26 Gross Margin Guidance55-57%Midpoint 56%, 350bps above the 52.5% consensus.
• FY26 Revenue Guidance€43bn-€45bnMidpoint €44bn, up 16% from the prior midpoint of €36bn-€40bn, implying 34.7% year-on-year growth.
• 2026 Low NA EUV Delivery TargetAt least 65 unitsAbove the prior 60-unit guidance.
• 2027 EUV Capacity Targetabout 85 unitsThe company guided EUV capacity up 30%.
• 2028 EPS PotentialAbove €65A rough estimate by JPMorgan based on capacity guidance.
• Target Price€1,900.00Jun-28 target price, equivalent to 29.4 times JPMorgan’s 2028 EPS.

Impact & implications

The report argues ASML’s strong guidance has a positive spillover effect on the semiconductor capital equipment segment, especially logic advanced-node ramp, 2nm ramp acceleration, early 1.4nm buildout, and higher EUV adoption in DRAM. If FY26 and 2028 earnings expectations are revised up by the market, ASML’s valuation discount to U.S. semiconductor equipment peers may narrow. For investors, the key implication is that ASML is not only delivering a near-term earnings beat; capacity expansion and order visibility may reshape the earnings trajectory in 2027-2028.

Risks

• Equipment export restrictions to key regions such as China could pressure revenue and earnings.
• An economic slowdown could weaken semiconductor capex and threaten JPMorgan’s earnings estimate and target price.
• Lower-than-expected EUV adoption could lead to downward revisions in earnings forecasts.
• Further interest-rate increases could compress valuation multiples, affecting target price.
• Failure to reach 90 EUV units in 2027 could be seen by the market as near-term expansion risk versus some optimistic expectations.

What to watch

• Whether 3Q26 actual sales come in within the €11bn-€12bn guided range and whether gross margin is near the 56% midpoint.
• Whether FY26 sales are delivered to the €44bn midpoint of guidance and gross margin remains in the 54-56% range.
• The executionability of 2027 EUV order coverage and the feasibility of the roughly 85-unit capacity target.
• Whether EUV and immersion DUV capacity in 2028 rises another 30% from the current orderbook base.
• Whether Installed Base Management revenue remains strong and further supports 2028 EPS potential.
• Whether China’s revenue mix stays near roughly 20% in FY26 and whether export restrictions change.
• Whether progress in Intel 18A production continues to validate the maturity of High NA tools.