Gross margin strength drives earnings upside

Research evidence excerpt

Gross margin strength drives earnings upside

Netherlands | Semi. Cap. Equipment

ASML Hldng EquityJulyResearch16, 2026

TARGET | ESTIMATE CHANGEGross margin strength drives earnings upside

Given the strength in advanced logic and DRAM demand, top line RATING HOLD

outperformance in 2026 and 2027 was not unexpected. The main positive PRICE €1,555.80^

surprise in our view is ASML's gross margin, which is trending materially PRICE TARGET | % TO PT €1,650.00 (€1,560.00) |

above expectations. We raise our forecasts, as well as our TP from €1560 +6%

52W HIGH-LOW €1,741.00 - €587.80

to €1650. On the cautious side we believe it may be too early to extrapolate

FLOAT (%) | ADV MM (USD) 97.2% | 1,391.17

2026-27 revenue and margin strength into 2028, with cyclical de-rating likely

MARKET CAP €617.0B | $706.2B

to limit share price upside.

TICKER ASML NA

^Prior trading day's closing price unless otherwise

Gross margin strength even without price increases: The market seems focused on potential noted.

price increases driving up ASML's gross margins in the current environment of demand

strength. On the conference call the CFO alluded to the possibility of price increases, as ASML

tries to capture the value provided through overlay and imaging improvement that has so far FY (Dec) CHANGE TO JEFe JEF vs CONS

not been captured. However the sharp jump in gross margins from Q2 and its strengthening 2026 2027 2026 2027

outlook into 2027 suggests that ASML does not really need price increases to get to the high REV +12% +14% +12% +15%

50s gross margin range in 2027. Capacity tightness at its customers is driving incremental EPS +22% +27% +25% +26%

upside of over €1bn in installed base management revenue this year, most of which is from

software productivity upgrades at 100% gross margin.