Goldman Sachs reiterates Buy on ASML, with AI demand and higher EUV throughput supporting upside

Overview

This report focuses on the extent to which ASML Holding is benefiting from the AI-driven semiconductor capital expenditure cycle. Goldman Sachs believes that rising demand in advanced logic, memory, HBM, HPC, and mobile applications is extending the strong EUV cycle and prompting ASML to raise its 2026 revenue outlook. The report also highlights that the installed base business, product mix optimization, improved EUV throughput, and signals of High NA customer adoption provide support for future margins and valuation.

Core views

The core views include: AI infrastructure investment continues to support EUV demand; memory customers are essentially sold out for the year and supply tightness may persist beyond 2026; logic customers are expanding capacity across multiple advanced nodes and advancing 2nm volume production; the non-EUV business is now expected to grow rather than remain flat year over year as previously anticipated; China revenue contribution is expected to be around 20%, which the report considers relatively conservative, and even if China demand weakens it could be offset by strong demand from other regions.

Analysis framework

The report uses a combination of company results and guidance, Visible Alpha consensus, order and capacity visibility, customer expansion commitments, product mix, and valuation multiples to assess changes in ASML's future revenue, gross profit, EBIT, EPS, and target price. The valuation section applies a 37x CY27 P/E multiple to the revised higher earnings forecasts.

Methodology notes

• Valuation methodsP/E target price method

  37x CY27 P/E

  Goldman Sachs kept the 37x CY27 P/E multiple unchanged and applied it to higher earnings forecasts, thereby raising the 12-month target price from €1,450 to €1,570.

• Fundamental factorsGS Factor Profile

  Growth, financial returns, valuation multiples, and composite percentile

  This framework provides investment context for the stock by comparing attributes such as growth, financial returns, and valuation multiples versus the market and industry peers.

• M&A scenarioM&A Rank

  M&A Rank 3

  ASML has an M&A Rank of 3, indicating a relatively low probability of becoming an acquisition target, and it is typically not included as a component of the target price.

Asset mapping & comparison

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

• ASML Holding NV (ASML.AS)

  Report subject and Buy-rated security

  Strengths

  Strong position in the EUV market, clear AI-driven demand for advanced logic and memory, customer expansion commitments that improve visibility on capacity ramp-up, improving High NA adoption signals, and installed base services supporting gross margin.

  Weaknesses

  Near-term output increases come with hiring and ramp efficiency pressure, and cost pressure may limit near-term gross margin upside.

  Comparison

  The 2027 EUV capacity target is at least 80 units, above the previous consensus of 72 units; the upper end of 2026 revenue guidance is higher than before.

  Risks

  EUV delays, volatility in the semiconductor capital expenditure cycle, adverse market share changes, and weaker-than-expected China demand.

Key data

• 1Q26 EBIT€3.2bn4% above consensus.
• 2026 revenue guidance€36bn-€40bnPrevious guidance was €34bn-€39bn.
• 2026 gross margin guidance51%-53%Maintained unchanged.
• FY26-30 revenue forecast revision+6%-10%Reflects AI-related advanced logic/memory demand and higher Low NA EUV ASP.
• FY26-30 EBIT forecast revision+5%-12%Reflects updated revenue and operating expense assumptions.
• FY26-30 EPS forecast revision+6%-12%Incorporates revisions to EBIT and share count assumptions.
• 2026 EUV capacity targetabout 60 unitsManagement is increasing its own output.
• 2027 EUV capacity targetat least 80 unitsAbove the prior consensus expectation of 72 units.
• High NA progressMore than 500k wafers processed, availability above 80%Customer adoption signals are strengthening.
• Target price€1,570Previously €1,450, based on 37x CY27 P/E.
• Current price€1,230Price as of the close on April 15, 2026.
• Implied upside27.6%Based on the target price and current price.

Impact & implications

The report has a positive investment implication for ASML: demand from AI/HPC, advanced logic, memory, and HBM strengthens the medium- to long-term visibility of EUV and High NA, while capacity expansion is supported by customer commitments and orders, and improvements in ASP and product mix are expected to drive revenue and margin upside. If China demand remains resilient, it could provide additional upside; if China slows, strong demand in other regions may partially offset it.

Risks

• Delays in EUV system deliveries or technology progress.
• A downturn in the semiconductor capital expenditure cycle causing orders or revenue to come in below expectations.
• Adverse changes in market share.
• China demand coming in below expectations, although the report believes strong demand in other regions may offset part of the impact.
• Hiring challenges, ramp inefficiencies, and cost pressure during the output increase process may weigh on near-term gross margin.

What to watch

• Whether 2026 revenue approaches the upper end of the €36bn-€40bn guidance range.
• Execution of the EUV system capacity ramp to about 60 units in 2026 and at least 80 units in 2027.
• Capacity expansion commitments and order sustainability from memory and logic customers, especially demand for HBM, advanced logic, and 2nm nodes.
• High NA EUV availability, wafer throughput, and customer adoption pace.
• Whether China revenue contribution remains around 20%, and whether China demand shows stronger-than-expected resilience or downside.
• The contribution of installed base services and upgrade business to gross margin.