ASML HOLDING NV (ASML): what the price assumes

In the published model solve dated 2026-Q2, anchored at $1698.11, ASML HOLDING NV (ASML) is priced for today's economics sustained for ~16.5 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-08-30 · Source: https://boothcheck.com/report/ASML

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Solve inputs: computed at a 12.3% cost of capital; growth searched up to the 25% self-funding ceiling.

How unusual the bet is: n/a

Valuation X-Ray

Every valuation family lands below the price. The price therefore sits beyond what those standard frames encode.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that call it expensive: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.

Per-Model Detail (n=17)

Solvency

Bullet Takeaways

• China is the single largest destination for ASML's shipments at 29% of revenue, ahead of Taiwan at 26% and South Korea at 25%, which makes the company's revenue map a fair proxy for where advanced chipmaking capacity is actually being built.
• Concentration is the structural risk and the 20-F quantifies it precisely: Total net sales to our largest customer amounted to €7,796.7 million, or 23.9% of total net sales in 2025, with 38.0% of total net sales going to the two largest customers combined.
• Management raised full-year 2026 revenue guidance to a range of €43 billion to €45 billion in July, up from €36 billion to €40 billion three months earlier, and the third-quarter report in October is the next check on whether that pace is holding.

Bull Case

The obvious objection comes first. Twenty-nine percent of ASML's revenue goes to China, a market where the equipment it sells is subject to export licensing and where policy can change faster than a delivery schedule. The 20-F does not pretend otherwise, noting that external factors such as the timing of subsidies and the risk of restrictions make forecasting market demand less predictable and warning that countries affected by export controls may also introduce countermeasures, which could result in conflicting regulations and legal liabilities. A quarter of the top line sitting inside a geopolitical argument is a real risk, not a manageable one.

What the data then does to that fear is instructive. If China exposure were the load-bearing part of the story, demand would be soft everywhere else. It is not. In July the company raised its full-year 2026 revenue guidance to a range of €43 billion to €45 billion, up from a range of €36 billion to €40 billion given three months earlier, and guided third-quarter revenue to between €11.0 billion and €12.0 billion. A company raising its own annual forecast twice in one year is not describing a business waiting on one government's permission slip.

Underneath that is an order book long enough to make quarterly demand almost beside the point. The 20-F discloses that As of December 31, 2025, the remaining performance obligations amount to €46.5 billion (December 31, 2024: €43.3 billion), work that is contracted but not yet delivered, and it grew year over year. Set against 2025 net sales the filing puts at EUR 32,667.3 million, that is well over a year of production already spoken for before a single new order is written. Very few capital-goods businesses have that kind of forward visibility, and it exists because the machines cannot be bought anywhere else.

The monopoly is the whole company, and the filing describes it without saying the word. ASML's extreme ultraviolet systems are what every leading-edge logic and memory process depends on, and the company frames its next-generation tools as essential to advancing Moore's Law. In 2025 it recognised 44 of its established EUV systems for €10,445.8 million and 131 immersion systems for €10,311.4 million, so both the leading-edge and the mainstream lines are earning at scale rather than one subsidising the other. Meanwhile €4,698.8 million went into research and development in 2025, up from €4,303.7 million in 2024, which is the ongoing cost of staying the only supplier.

What that position produces shows up in the cohort comparison, and it is worth being precise about what it does and does not show. ASML converts 34.6% of its revenue into operating profit. LRCX converts 34.3%, AMAT 28.6% and TER 26.5%. On current profitability the company is at the top of a strong group rather than in a category of its own. The difference is not this year's economics; it is that LRCX, AMAT and TER all face competitors in their equipment categories and ASML does not in its own. The balance sheet reflects the same comfort: operating income covers the interest bill roughly 95 times over, the company is not consuming cash, and the share count has come down about 1.3% a year over the four years to the end of 2025.

Bear Case

The price is not paying for the machines ASML sells today. It is paying for a specific future in which the next generation of them becomes the industry standard, and that future is further from proven than the share price suggests. The 20-F states the dependency in the company's own words: the success of our EUV 0.55 NA (High NA) technology - which we view as essential to advancing Moore's Law - depends on continued technical progress by both us and our suppliers. Not on demand. On technical progress that has not yet happened.

The scale of the gap between that narrative and the current reality is in the shipment table. Across 2025 the company recognised four of the new High NA systems, for €1,156.9 million, against 44 units of the established EUV platform for €10,445.8 million and 131 immersion systems for €10,311.4 million. The technology carrying the story is roughly a twentieth of system revenue. Worse for the thesis, it currently makes the economics slightly harder rather than easier: the filing attributes part of the year's gross-profit pressure to the dilutive impact of EXE systems recognized in sales. Early units of a new platform cost more to build than they earn back, which is normal, and is also precisely the phase the price has already assumed is over.

The second fragility is who the customers are. The 20-F is blunt: Total net sales to our largest customer amounted to €7,796.7 million, or 23.9% of total net sales in 2025, up sharply from €4,682.4 million, or 16.6% of total net sales in 2024, and 38.0% of total net sales were made to our two largest customers. Concentration got worse, not better, in the year the stock rerated. Two customers deciding to slow a capacity ramp is not a tail scenario in an industry the filing itself describes as one where customers decrease, cancel or delay their orders and where the company has experienced customers scaling back their capacity additions.

Then the arithmetic. The market is paying roughly 53 times what the company earns before interest and tax, a multiple that sits at the very top of its peer distribution and well beyond the upper quartile of it. Translated into time rather than into a ratio, that requires operating profit to keep growing at the fastest pace the business can fund from its own cash flow for something close to 17 years. Of comparable fast-growing companies, only about 14% sustained such a run for even a decade. And the disagreement among the standard methods is unanimous in one direction: not one family of valuation approach reaches today's quote. Asset value, earnings power, peer multiples and the cash-flow methods all land below it.

There is a real answer to this, and it should be stated: ASML is genuinely a monopoly on the most important tool in the most important industry, and monopolies with that profile do not mean-revert on schedule. The bear case does not dispute the position. It disputes the duration. Seventeen years is longer than the entire history of EUV in production, longer than most chipmaking process transitions, and long enough that a single technology change in how transistors are patterned would end it. The company also stopped publishing quarterly bookings from the first quarter of 2026, arguing that lumpy large orders distort the read. The reasoning is defensible. The effect is that the single number an outside investor used to test the durability assumption is no longer published.

Valuation

The market is paying about 53 times what this company earns before interest and tax. That is a fact about a ratio; the useful version is a fact about time. Held at the fastest growth rate the business can fund out of its own cash flow, it takes roughly 17 years of compounding for that multiple to be earned back. Seventeen years is not a forecast anyone makes. It is what the price implies if you take it seriously.

How unusual that is can be measured two ways, and both point the same direction. Against the equipment cohort, the multiple sits at the very top of the distribution and well beyond its upper quartile. Against history, only about 14% of comparably fast-growing companies sustained that pace even ten years, let alone seventeen. The requirement is not that ASML grows fast. It is that ASML grows fast for longer than almost anything has.

The methods are unanimous, which is rare and worth stating plainly: no family of valuation approach reaches today's quote of $1756.93. The asset-based lens, which builds from the $54.82 of book value behind each share and credits the extraordinary return the company earns on it, lands below. So does the earnings-power lens, which capitalises a five-year average of operating profit with no growth at all. So do peer multiples. So do the cash-flow methods on their central settings. The one calculation that gets above the quote does it by assuming the multiple the market pays on cash profits today is still being paid six years from now, which is an assumption about the market rather than about the business.

Cohort position sharpens rather than softens the point. ASML converts 34.6% of revenue into operating profit. LRCX converts 34.3%, AMAT 28.6%, TER 26.5% and KLAC sits in the same band. Current profitability, in other words, is excellent and not unique. Whatever the market is paying the premium for, it is not this year's economics; it is the belief that ASML's economics are the only ones in the group that cannot be competed away. That belief has a strong factual basis in the monopoly on extreme ultraviolet lithography and no arithmetic basis in the trailing numbers.

The balance sheet does not constrain any of this. Funded borrowings are trivial against what the business earns, operating income covers the interest bill roughly 95 times over, and cash is being generated rather than consumed. The share count has drifted down about 1.3% a year over the four years to the end of 2025, so capital has been returned steadily rather than dramatically. What the balance sheet cannot do is shorten the seventeen years. A company with no leverage and no cash burn can wait indefinitely for its story to come true; the investor paying today's quote for it cannot.

Catalysts

The July report changed the shape of the year. On July 15, 2026 ASML reported second-quarter total net sales of €9.3 billion with a gross profit share of 54.0% of revenue, beating its own guidance on stronger demand from the installed base and continued spending tied to artificial-intelligence capacity. More consequentially, it raised full-year 2026 revenue guidance to a range of €43 billion to €45 billion, against the €36 billion to €40 billion range it had given three months earlier, and guided third-quarter revenue to between €11.0 billion and €12.0 billion. That is the second increase to the annual forecast in a single year.

The transparency picture moved the other way. From the first quarter of 2026 the company stopped publishing quarterly bookings, on the reasoning that individual large orders arrive unevenly and distort the read on underlying momentum. Management has since described order intake through the first half as extremely strong. Both things can be true, and the practical consequence is that the durability of demand now has to be inferred from revenue guidance and management commentary rather than read directly off a disclosed number.

Two dated items sit ahead. The third-quarter report in October is the first test of the raised guidance against actual shipments, and the continuing qualification of the High NA platform is the slower-moving one. The 20-F records that by the end of 2025 our customers had run more than 400,000 wafers on High NA EUV systems and that the company had demonstrated full specification of the TWINSCAN EXE:5200B at a customer site. Moving from demonstration to volume production orders is the transition that matters most to the long-run story, and it will show up in unit counts in the annual report rather than in any quarterly headline.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

• LRCX (LAM RESEARCH CORPORATION)
• FY2025 10-K: …liability, restructuring charges, impairment of long-lived assets, and transformational charges. Segment results are derived from the Company's internal management reporting system utilizing policies that are substantially the same as those used for external reporting purposes. The CODM utilizes segment revenue…
• FY2025 10-K: …includes sales of new leading-edge equipment in deposition, etch, clean and other water fabrication markets. Customer support-related revenue includes sales of customer service, spares, upgrades, and non-leading-edge equipment from the Company's Reliant® product line. The Company operates in one reportable business…
• AMAT (APPLIED MATERIALS INC /DE)
• FY2025 10-K: …in which we operate; • the importance of increasing market positions in segments with growing demand; • manufacturers' ability to reconfigure and re-use equipment, resulting in diminished need to purchase new equipment and services from us, and challenges in providing parts for reused equipment; • the availability of…
• FY2025 10-K: …shipment schedules, this may strain our manufacturing and supply chain operations and negatively impact our working capital. If we are unable to accurately forecast demand for our products, we may purchase more or fewer parts than necessary or incur costs for canceling, postponing or expediting delivery of parts. If…
• KLAC (KLA CORPORATION)
• FY2025 10-K: …of new technologies like AI, with that region recording 27% and 18% of total revenues during fiscal years 2025 and 2024, respectively. The remaining regions accounted for less than 20% of total revenues individually in all periods. Gross margin Our gross margin fluctuates with revenue levels and product mix and is…
• FY2025 10-K: …development and manufacturing processes to enhance productivity, improve yields and reduce waste. To remain competitive, we use significant financial resources to offer a broad range of products, to maintain customer service and support centers worldwide, and to invest significantly in product R&D. In each of our…
• ACLS (AXCELIS TECHNOLOGIES INC)
• FY2025 10-K: ​ 44.9 % ​ 44.7 % ​ ​ ​ ​ ​ ​ ​ Product ​ Gross margin from product revenue was 47.9% for the twelve months ended December 31, 2025, compared to 46.3% for the twelve months ended December 31, 2024. The increase in gross margin resulted from an increased mix of higher margin parts and upgrades . ​ Services ​ Gross…
• FY2025 10-K: …a party to litigation that arises in the normal course of our business operations. ​ (c) Indemnifications ​ Our system sales agreements typically include provisions under which we agree to take certain actions, provide certain remedies and defend our customers against third-party claims of intellectual property…
• ACMR (ACM Research, Inc.)
• FY2025 10-K: …tools that we produce for a customer that potentially may not be accepted. Refer to "Item 1A. Risk Factors-Risks Related to Our Business and Our Industry-Difficulties in forecasting demand for our tools may lead to periodic inventory shortages or excess spending on inventory items that may not be used." Cost of…
• FY2025 10-K: …and advanced packaging (excluding ECP), services and spares. We attribute the increase to a longer-term commitment by our mainland China-based customers to increase production capacity to achieve a greater share of the global semiconductor market together with the market share changes and product cycles. The increase…
• VECO (VEECO INSTRUMENTS INC.)
• FY2025 10-K: …also lead to intensified price competition resulting in lower profit margins. ​ 17 Table of Contents We operate in industries characterized by rapid technological change. ​ Each of the industries in which we operate is subject to rapid technological change. Our ability to remain competitive depends on our ability to…
• FY2025 10-K: …systems. As a result, the timing for the recognition of revenue for a single transaction could have a material effect on our sales and operating results for a particular fiscal period. As is typical in our industry, orders and shipments often occur during the last few weeks of a quarter. As a result, a delay of only…
• TER (TERADYNE, INC.)
• FY2025 10-K: …landscape, which could negatively impact our competitive position. If in the future we are unable to maintain our competitive position, we could experience downward pressure on prices, fewer customer orders, reduced margins, the inability to take advantage of new business opportunities and a loss of market acceptance…
• FY2025 10-K: Table of Contents Sales to customers outside the United States were 89%, 87%, and 84%, respectively, of our consolidated revenues in 2025, 2024 and 2023. Sales are attributed to geographic areas based on the location of the customer site. See also "Item 1A: Risk Factors" and Note V: "Segment, Geographic, and…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.