ASML Raises 2026 Sales Outlook Again, Plans Major Capacity Expansion

What happened

ASML raised its 2026 sales guidance for the second time this year to €43–45 billion, well above the €36–40 billion range in our recent DeepValue report, and announced plans to expand EUV machine capacity by 30% in 2027 with another 30% under study for 2028. This implies even stronger AI-driven demand than the bull case we modeled, but the stock already trades at 61x P/E—reflecting stretched expectations that leave little room for disappointment. The raise de-risks the near-term demand story, yet execution on the 2027–2028 capacity adds and the China export control overhang remain critical watchpoints. Valuation at $1,815 suggests the market is pricing in the upside, so any slip in customer capex or policy tightening could trigger a sharp re-rating. Investors should weigh the improved outlook against the rich multiple and crowded AI narrative before committing new capital.

Implication

The guidance increase validates the AI-led demand thesis and supports a higher revenue baseline, but with the stock up 126% in a year and trading at 48x EV/EBITDA, the risk/reward is unattractive. A better entry would be on weakness from any China policy shock or customer capex pause.

Thesis delta

The previous base case of €36–40 billion in 2026 sales is now obsolete; the new guidance of €43–45 billion surpasses even our bull case of €40 billion, reducing near-term demand risk but increasing the bar for further upside. The rating remains WAIT because the stock price already reflects this rosier scenario, leaving no margin of safety.