ASML Stock Rises on Upgraded Rating and Raised Guidance

ASML's Q1 earnings report led to increased guidance and a stock rating upgrade by Freedom Broker, citing strong demand for AI chip equipment.

ASML reported Q1 2026 revenue of €8.8 billion and net income of €2.8 billion, with gross margin of 53.0% hitting the top of guidance — a result that prompted Freedom Broker to upgrade its rating on the stock and analysts to revise their 2026 estimates higher. The company simultaneously lifted its 2026 full-year revenue guidance to €36–40 billion from a prior range of €34–39 billion, citing sustained demand from AI-driven semiconductor capacity expansion.

Despite the headline beat, ASML shares fell approximately 6% on the day, as Q2 revenue guidance of €8.4–9.0 billion came in below some analyst consensus targets. A key concern was the continued decline in China-related revenue, which fell to just 19% of total sales in Q1 from 36% in the prior quarter — reflecting tightening export control restrictions on shipments of advanced lithography equipment.

The longer-term investment case for ASML remains anchored to its monopoly position in extreme ultraviolet (EUV) lithography. TSMC's $52–56 billion 2026 capital expenditure plan and similar expansions at Samsung and Intel will require ASML equipment, creating a multi-year order backlog. The stock's short-term volatility around earnings belies the structural demand tailwind that AI infrastructure buildout represents for semiconductor equipment suppliers.