ASML Surges to $396B Valuation as Investors Focus on 2026 Growth Visibility

CEO offers more visibility into 2026 growth.
Dutch semiconductor company recently became the most valuable firm in the EU.
This week, ASML’s market cap surged even higher to around $396 billion as its stock price jumped about 8% to $1,022 per share.
The catalyst was its third quarter earnings report, even though it was a bit of a mixed bag. But for investors, the good news was on the horizon.
ASML, based in the Netherlands, has a very lucrative niche in the booming semiconductor industry. It makes the equipment, photolithography machines, that chipmakers use to print patterns and designs on the chips. They are not only the leader in this space; they are the most dominant player with a market share estimated at around 90%.
As such, the stock has been a huge winner over the years with a five-year annualized return of 21% and a 10-year annualized return of 27%. This year, ASML stock has returned around 47%.
A Mixed Bag in Q3
ASML delivered mixed results in Q3. Revenue increased around 1% year-over-year to €7.5 billion, or $8.8 billion in USD. However, that was down around 2% compared to Q2 of 2025, mainly due to the timing of shipments. That was also below analysts’ estimates, which called for about €7.8 billion in sales. However, its pipeline is strong with €5.4 billion in net bookings in the quarter.
Net income was up about 2% in Q3 to €2.12 billion or $2.45 billion. But that was off about 7% from the previous quarter. However, it was better than estimates of €2.1 billion.
Further, ASML had a healthy gross margin of 51.6%, but that too was down from Q2, when it was 53.7%.
The sales, earnings, and margin results were in line with what ASML management expected. But still, the numbers weren’t spectacular. However, it wasn’t necessarily the quarterly results that fueled the rally. It likely had more to do with improved visibility into 2026 growth.
China Concerns
When ASML released Q2 earnings in July, ASML President and CEO Christophe Fouquet could not provide any guidance for 2026 due to the uncertainty surrounding tariffs. As a result, the stock price plummeted 8%.
After Q3, Fouquet did provide some guidance. The CEO said ASML does not expect 2026 total net sales to be below 2025, despite concerns about its business with China. And in 2025 the firm projects a full-year 2025 total net sales increase of around 15%.
“On the market side, we have seen continued positive momentum around investments in AI, and have also seen this extending to more customers, both in leading-edge Logic and advanced DRAM,” Fouquet said. “On the other hand, we expect China customer demand, and therefore our China total net sales in 2026, to decline significantly compared to our very strong business there in 2024 and 2025.”
This certainly pleased investors, as did ASML’s projections for a “very strong” fourth quarter.
“We expect fourth-quarter total net sales between €9.2 billion and €9.8 billion, with a gross margin between 51% and 53%,” Fouquet said.
The improved visibility also led to several price target upgrades from analysts. ASML stock currently has a median price target of $1,085 per share, which suggests about 7% upside.