ASML cannot build machines fast enough, and customers now want to order for 2029 and 2030

	3Q26	3Q25	% Change
Total Net Sales	11,662	7,516	55.20%
Net System Sales	8,373	5,554	50.80%
Installed Base Management Sales	3,289	1,962	67.60%
Income from Operations	5,173	2,468	109.60%
Net Income	4,960	2,125	133.50%
EPS (EUR)	12.95	5.49	135.90%
Source: Company data. Data as of 14 Oct 2026. Figures are in EUR millions unless otherwise stated. Net income includes a gain of ~EUR 0.5 billion on Mistral AI.

Management expects that momentum to continue. It now expects full-year net sales of EUR 44–45 billion, lifting the bottom of its range by EUR 1 billion. That is approximately 36% above 2025’s EUR 32.7 billion at the midpoint. Gross margin is guided to around 56%, against the 51–53% ASML pencilled in at the start of the year. The fourth quarter should be stronger still. 4Q26 guidance of EUR 14.2–15.2 billion implies growth of around 51% at the midpoint, with installed base sales of about EUR 3.7 billion.

By segment, EUV is expected to grow over 45%, non-EUV around 20% and installed base management around 50% (up from over 30% guided in July). Memory net system sales are guided up around 75% and logic around 10%. Management ties the memory growth to capacity expansion and to rising EUV adoption on advanced DRAM nodes, with the latter making demand more structural rather than cyclical.

Supply, not demand, is now the constraint through 2028

Chipmakers are securing long-term commitments from their own customers, which gives them enough visibility to conclude that demand will outpace supply through at least 2028. ASML is increasingly receiving orders for 2028, and some customers are expressing interest in ordering for 2029 and even 2030.

That puts the onus on ASML to deliver more.

ASML expects to ship roughly 65 Low-NA EUV systems in 2026, nearly 50% more than the 44 shipped in 2025. DUV immersion shipments are now planned at a similar level to 2025, against an initial target well below it.

In an earlier update, we noted that ASML planned to increase 2027 production capacity by 30% for both EUV and DUV immersion systems. However, management now expects planned output in 2027 and 2028 to fall short of customer demand and is exploring ways to expand 2028 capacity by more than 30%.

New system sales are not the only avenue for growth. Productivity upgrades add output within a customer’s existing footprint, which is why installed base sales keep beating guidance. New products add more: the NXE:3800F (a Low-NA EUV machine), arriving in small quantities in 2027, is specified at 260 wafers per hour versus 230 today, a 13% gain, and immersion tools shipped in 2027 will be specified at 330 wafers per hour.

Pricing is another growth driver. CFO Roger Dassen said ASML has concluded negotiations to implement higher value-based pricing for its critical products, with prices better reflecting the value its tools deliver to customers. The impact is expected to emerge gradually in 2027, with the full effect kicking in from 2028.

Customers are also backing demand with cash. Free cash flow was EUR 11.4 billion in 3Q26, which the CFO linked to customer downpayments, and non-current contract liabilities rose from EUR 3.6 billion to EUR 9.3 billion. ASML has been asking for sizeable downpayments on orders, which Dassen said on the earnings call are “enough to hurt” if customers later try to cancel. We think that is strong support for the demand outlook as customers are putting real money at risk to secure capacity.

High-NA now has dates: Samsung in 2028 and TSMC from 2030

High-NA is ASML’s next-generation EUV machine, built to reduce the number of patterning steps needed at advanced nodes. We have flagged TSMC’s eventual adoption as an unpriced catalyst since May, and the question has been when, not if: TSMC had said publicly that machines priced at up to USD 400 million each were too expensive. This quarter answered the "when". On 8 September, in a joint release with ASML, TSMC said it intends to use High-NA in high-volume manufacturing for advanced nodes starting in 2030, and expects the number of layers requiring it to rise as nodes advance, driven by more complex AI transistor designs.

The same day, Samsung said it plans to bring High-NA into high-volume DRAM manufacturing by 2028, a first for the industry. Intel has already exposed more than 1 million wafers on its High-NA systems, with performance that meets or exceeds comparable Low-NA layers, and fleet availability is approaching 90%.

Near-term revenue is still small, with one High-NA system sold in 3Q26. But with High-NA machines carrying roughly double the price tag of existing EUV systems, a ramp at the world’s largest foundry would lift ASML’s order book beyond what current guidance implies.

A supply-constrained monopoly now offers 70% upside to our USD 2,660 target price

This quarter’s results reinforce our investment thesis. Demand is visible through 2028 with customers already reaching for 2029 and 2030, installed base sales are guided up around 50% this year, and High-NA has moved from roadmap to dated commitments. Once more, ASML is the only company that can supply these machines, and it is now telling us it cannot make enough of them.

This is why we believe ASML deserves to command a premium valuation. Based on a fair PE of 32X applied to 2028 estimated earnings, we project an upside potential of approximately 70.5%, translating to a target price of USD 2,660 (as of 22 October 2026). Compared with our July target of USD 2,266, the revised target reflects a 19% increase in our 2028 EPS estimate, driven by stronger guidance, expanded capacity plans and improved pricing.

The past week’s sell-off has made ASML’s upside even more compelling. Its shares have fallen more than 20% from their peak this year, despite delivering record quarterly results, raising full-year guidance and signalling that demand will continue to outstrip supply through at least 2028.

Nothing in the results argues for a lower multiple. We believe investors should look beyond the recent volatility and consider buying the dip in a company whose long-term growth prospects remain firmly intact.

Table 2: ASML expected to see robust earnings growth in the coming years

	2025	2026E	2027E	2028E
EPS (EUR)	26.29	41.19	56.66	75.63
EPS growth	23.83%	56.68%	37.56%	33.48%
PE Ratio	35.05	34.46	25.05	18.77
Upside Potential (based on 32X multiple)	-	-	-	70.48%
Source: Bloomberg Finance L.P., iFAST Estimates Data as of 22 Oct 2026