ASML’s Capacity Bonanza Collides With Washington’s China Crackdown
Published on 06/18/2026 at 05:32 | Redaktion boerse-global.de
The Dutch lithography giant is navigating two powerful forces at once. On one side, a newly discovered ability to build more EUV machines than anyone thought possible is driving a wave of analyst upgrades. On the other, a fresh US bill targeting older DUV systems threatens to shrink the China business that once provided a third of revenues. The stock, trading at €1,630.40, sits just 2.7% below its June 15 record, up nearly 65% since January.
JPMorgan’s Sandeep Deshpande has recalculated ASML’s manufacturing ceiling. The company can deliver more than 110 low-NA EUV systems per year without constructing a single new factory — a far cry from the 90 units investors had penciled in as the upper limit. Since every advanced AI chip passes through an ASML scanner, any capacity expansion directly unlocks more wafer output for chipmakers in Taiwan, South Korea and the US.
Morgan Stanley points to an announcement at ASML’s April shareholder meeting as the catalyst. The company plans to expand its facility at the Brainport Industries Campus in Eindhoven, with construction starting in the third quarter of 2026. That timeline signals that the higher output is not a one-off but a structural ramp.
The capacity surprise has triggered a cascade of target hikes. Citi lifted its price objective to €1,675 from €1,600, raising 2026 and 2027 revenue estimates by 4% and 3%, respectively, and lifting its 2026 earnings-per-share forecast by 6%. BofA now sees €1,921, while Barclays and JPMorgan both target €1,900. The lone dissenter is Morningstar, which downgraded the stock to “Sell” in May, citing a cyclical valuation risk.
Should investors sell immediately? Or is it worth buying Asml?
That bullish backdrop clashes directly with Washington’s legislative push. The MATCH Act, currently moving through Congress, would close the remaining loophole that still allows ASML to ship older DUV lithography systems to China. Even more damaging, it would also ban servicing of machines already installed in Chinese fabs. China accounted for roughly a third of ASML’s total sales last year, though that share had already fallen to 19% in the first quarter of 2026. Management had forecast a further decline to around one-fifth for the full year; the new law could push that number even lower.
ASML is compensating for the China shortfall with a surge in high-margin EUV orders from Western chipmakers racing to build AI capacity. The company lifted its full-year revenue guidance to 16% growth — about €38 billion — up from an earlier 12% target. First-quarter results reinforced the trend: revenue hit €8.8 billion, up 13% year-over-year, with earnings per share of €7.15. EUV systems alone contributed more than €4.1 billion, including two high-NA units.
The company is also propping up its stock through a massive buyback. During the second week of June, ASML spent nearly €16 million per day repurchasing its own shares. Institutional investors have taken notice: 133 hedge funds held positions at the end of Q1, up from 101 the prior quarter, with FMR LLC doubling its stake to roughly $2.04 billion.
Asml at a turning point? This analysis reveals what investors need to know now.
Technically, the stock’s RSI stands at 64.6 — not yet overbought but close. The annualized 30-day volatility of 54% leaves room for sharp swings in either direction. The second-quarter report, due in July with revenue expected between €8.4 billion and €9.0 billion, will either validate the capacity-driven optimism or expose the vulnerability hidden beneath the China risk. For now, the €1,900 target shared by JPMorgan, Barclays and BofA remains the reference point the market is testing against.
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