ASML: Dip Presents a Compelling Opportunity Amid Macro Concerns

This analysis was originally published as a stock note by Morningstar Equity Research.

Key Morningstar Metrics for ASML Holding

• Fair Value Estimate: EUR 850
• Morningstar Rating: ★★★★
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: High

Morningstar Maintains Fair Value Estimate

Amsterdam-listed ASML booked new orders of EUR 3.9 billion in the first quarter of 2025. This was below expectations, sending the stock down 6% in early trading on April 16. We reiterate our view that investors must not make long-term readouts from quarterly orders.

Why it matters: In a highly uncertain environment, investors are trying to figure out if global tariffs will generate a global recession and how deep it could be. ASML reconfirmed its EUR 30 billion to EUR 35 billion revenue guidance for 2025, but investors are already starting to look at 2026.

• We model EUR 33 billion and EUR 37 billion in sales in 2025 and 2026, respectively. To realize EUR 37 billion revenue in 2026, we estimate ASML needs an average of EUR 6 billion in system orders per quarter during the next three quarters, which we see as achievable.
• AI remains the growth driver of the industry. TSMC is raising its capex by 34% this year, while memorymaker SK Hynix will reportedly bump its 2025 capex guidance by 30%, from $15 billion to $20 billion, according to South Korea media The Elec. However, the recovery of more traditional markets like smartphones or automotives could be pushed beyond second-half 2025 if global GDP growth stalls.

The bottom line: We maintain our EUR 850 fair value estimate for wide-moat ASML, with shares offering 50% upside.

• ASML shares are down 18% year to date and 38% in the last year, trading at EUR 570 early on April 16. Even if a global recession is not fully priced in, the stock is already discounting significant macro uncertainty. Share prices will recover before earnings do.
• ASML is now trading at 24 and 19 times our EPS estimates for 2025 and 2026, respectively, in line with other weak macroeconomic periods like October 2022 and March 2020. We believe this is an attractive entry point for a firm we expect will grow earnings in the mid-teens during the next decade.

Coming up: The Trump administration is expected to give more details on semiconductor-specific tariffs this week.