Key Takeaways
- ASML stock is up 10% in the past week as chip stocks rebounded and Musk’s Terafab reportedly set a target of 1 million wafers a month.
- Applied Materials and TSMC gained even more, so most of ASML’s jump came with the group.
- Customers are paying ahead for ASML’s machines, and analysts expect its EPS to roughly triple from 2025 to 2028.
- At about 23x forward earnings, the stock looks like a buy ahead of its Jan. 27 report.
ASML Holding (ASML) is up 10% in the past week. That makes up for the 8% it lost on Nov. 5, when investors worried that Democrats’ midterm wins would slow data-center spending.
Applied Materials (AMAT) gained 16% and Taiwan Semiconductor (TSM) gained 13% over the same stretch, while the Nasdaq 100 rose 5%.
Terafab adds fuel to a chip rebound
Most of the gain came on Monday, Nov. 9. That day, Nikkei Asia reported that Terafab, the chip project of Tesla and SpaceX, had told equipment suppliers it’s aiming for 1 million wafers a month by 2032. That would take a lot of EUV machines, and only ASML sells them. Of course, it’s only a target: Terafab hasn’t built its first fab yet.
Applied Materials sells to the same chipmakers. After Thursday’s close, it reported record quarterly revenue of $10.4 billion, up 53%. It also guided to about $11.1 billion for the current quarter.
TIKR tracks 41 analysts on ASML Holding. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on ASML Holding, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See ASML Holding’s Analyst Ratings
Customers are still paying to wait in line
Third-quarter sales rose 55% to a record €11.7 billion. In the results release, CEO Christophe Fouquet said supply as currently planned for 2027 and 2028 “will not fully meet the demand of our customers.” Some customers want to order for 2029 and 2030, and they’re paying ahead: noncurrent contract liabilities jumped from €3.6 billion to €9.3 billion in the quarter.
TSMC, the customer I’d watch, said in October it’s planning cautiously for 2027.
Analysts expect ASML’s normalized EPS to roughly triple, from €24.71 in 2025 to €76.65 in 2028:
Still cheap against its own history
Even after the bounce, ASML sits 25% below its June 30 high. It trades at about 23x forward earnings. That compares with 47x at the end of June and a five-year average of 33x:
The main risk is a slowdown in data-center spending, since ASML’s plans assume chipmakers keep buying through 2028. CFO Roger Dassen has also said the MATCH Act, a proposed US ban on DUV immersion sales to China, could come up after the midterms. China is about 20% of ASML’s expected 2026 sales.
Still, a business whose customers are paying ahead for 2028 machines looks like a buy to me at 23x. ASML gives its first 2027 outlook on Jan. 27, and that’s when we’ll find out whether chipmakers are ordering any less.
So what is ASML stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what ASML could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
