ASML Holding is set to report its second-quarter earnings before the U.S. market opens on Wednesday. Wall Street is backing the chipmaking equipment company to raise its sales guidance as it benefits from an unprecedented wave of investment in semiconductor manufacturing.
ASML is Europe's largest company by market value and holds a near monopoly on lithography machines, which are crucial for manufacturing the most advanced semiconductors.
The Dutch company's American depositary receipts have risen 61% this year so far through Monday's close and were gaining 3.4% in Tuesday's premarket.
Taiwan Semiconductor Manufacturing, the world's most important chip manufacturer, recently said it would make enormous investments in production capacity this year and for several years ahead, which has buoyed investor sentiment toward ASML. Memory-chip companies such as Micron Technology and South Korea's SK Hynix are also investing heavily in manufacturing.
Analysts tracked by FactSet are looking for ASML to report a net profit of EUR2.65 billion ($3.03 billion) on EUR8.90 billion in revenue.
The large price tag of ASML's machines means revenue numbers can swing significantly from quarter to quarter, so investors have tended to focus on its longer term order numbers. But ASML has said it would no longer disclose quarterly order numbers.
That means the focus could instead be on its guidance for the year overall. ASML most recently guided for 2026 sales in the range of EUR36 billion to EUR40 billion.
However, analysts at Jefferies expect ASML could raise its annual revenue guidance to EUR38 billion-EUR42 billion, on the basis of more than 60 extreme ultraviolet $(EUV)$ lithography machines being shipped this year, rising to around 90 next year.
Jefferies analysts have a EUR1,560 target price on the company's Amsterdam-listed stock, which was trading around EUR1,555 on Tuesday. They note the company already trades at a price-to-earnings ratio of 38 times consensus forecasts for its 2027 earnings, which is in line its previous peak valuation.
UBS analyst Francois-Xavier Bouvignies also thinks ASML could shift its guidance toward the upper end of the range, or potentially slightly above. He recently raised his target price on the stock to EUR2,100 with a Buy rating.
One topic of focus is likely to be China. ASML is banned from exporting its most advanced tools to China and has previously said it expects Chinese sales to comprise only 20% of 2026 sales. However, it made a similar prediction for 2025 and eventually made a third of its sales to China last year.
"We do not expect any change in the situation in China, with the company's sales to that market expected to decline by 20-30%, with China accounting for around 20% of sales this year in line with previous guidance," Jefferies analysts wrote.
Write to Adam Clark at adam.clark@barrons.com
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July 14, 2026 16:00 ET (20:00 GMT)
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