ASML has promised that its sales will not decline in 2026. Will the rally continue?

Netherlands-based ASML, Europe's most valuable public company, reassured investors with a pledge to maintain sales in 2026 despite weakening demand in China and an optimistic outlook for the final quarter of this year. The official forecast from the world's only supplier of equipment for printing chips in deep ultraviolet was key for investors at a time when global volatility makes it impossible for the company to guarantee growth next year.

"We do not expect net sales in 2026 to be lower than in 2025. We will provide more details on our forecast in January," ASML chief Christoph Fouquet said in a statement timed to coincide with the release of the quarterly earnings. For 2025, the company expects net sales to grow by about 15% and gross margin to be around 52%, with "a very strong fourth quarter forecast," the top executive added.

It was clarity on 2026 guidance that was most important to investors after the stock collapsed in mid-July, when ASML warned that it could not guarantee growth due to economic and political uncertainty, CNBC noted.

According to Fouquet, ASML management is seeing continued positive momentum in artificial intelligence investments, with an increasing number of customers in both the advanced processor and advanced DRAM memory segments. "On the other hand, we expect demand from Chinese customers and therefore our sales in China to decline significantly in 2026 compared to the very strong performance of our business in that country in 2024 and 2025," the CEO warned.

The manufacturer's sales in the third quarter of 2025 reached €7.5 billion with a consensus forecast of €7.7 billion, while the company attracted orders for €5.4 billion, which was significantly ahead of market expectations - analysts' estimates were €4.9 billion, Bloomberg reports.

After the publication of the quarterly report with the forecast, ASML shares jumped by 3.8% in Amsterdam trading. At that, Jefferies analyst Janardon Menon evaluated the company's release skeptically. "In our opinion, these results and comments on the forecast do not give any special arguments to either bulls or bears," he wrote. - "But after such a strong rally, we believe this order momentum amid the lack of confidence in growth in 2026 is not enough to provide further significant upside for the stock

Against the backdrop of the AI boom and expectations of growing orders for chip manufacturing equipment, the capitalization of the Dutch manufacturer has soared by almost 30% since the beginning of 2025. And in September, its securities showed the best monthly result in the last two decades, making the company the most expensive in Europe, according to Bloomberg.

Menon from Jefferies maintained a "Hold" recommendation on ASML shares and a target price of €780, which implies an 8% decline in quotations from the current level. At the same time, Wall Street is generally moderately optimistic - with the consensus forecast "above the market" (Outperform, corresponding to the recommendation to buy shares) and the average target of 5.7% above the closing level of trading in Amsterdam on October 14.

At least four brokers have upgraded their recommendations on ASML securities after raising forecasts for the company's key customers, Intel and Samsung Electronics, Bloomberg notes .

This article was AI-translated and verified by a human editor