ASML 2026 Q1 Earnings Preview: High Valuation Already at Peak, Can AI Orders Support Growth Expectations?

TradingKey - Global lithography leader ASML ( ASML) is scheduled to disclose its first-quarter 2026 financial results on April 15, as market attention on the company's short-term performance fluctuations and long-term growth potential continues to intensify.

Over the past five trading days, ASML's stock price has risen by a cumulative 7.59%. However, Wall Street generally believes the company's current valuation is at a premium, and any deviation in the upcoming earnings guidance could trigger significant price volatility, which also provides short-term trading opportunities for active traders.

According to the latest consensus estimates from FactSet, ASML's first-quarter revenue is expected to reach 8.61 billion euros, representing an 11.2% year-on-year increase, with earnings per share projected at 6.57 euros.

Prior to this, ASML management had already issued full-year 2026 performance guidance, with revenue projected between 34 billion and 39 billion euros, the midpoint of which corresponds to a 12% year-on-year increase; gross margin is expected to be maintained between 51% and 53%. The company also proposed long-term growth targets, forecasting that annual revenue will reach between 44 billion and 60 billion euros by 2030.

Samsung P5 Fab Emerges as Key Focal Point

Since ASML has stopped disclosing specific bookings data starting this quarter, market attention has shifted toward management's qualitative commentary on customer demand.

Notably, AI chip demand continues to drive investment in advanced process nodes, with logic customers led by TSMC showing strong procurement interest in EUV systems.

SK Hynix is reportedly spending approximately $8 billion on EUV equipment, and progress on Samsung's order of about 20 EUV units for its P5 fab is regarded by JPMorgan as the "most significant news lead" in this earnings report. Given the current tight supply in the memory market, TSMC is expected to more frequently disclose delivery schedules for 2027 and beyond throughout 2026, which will further solidify ASML's order visibility.

As a critical next-generation tool, the order confirmation and shipment cadence of High-NA EUV will be a vital signal of market confidence; investors will focus on the EUV share of Q1 system sales, High-NA order volume, and updates to the 2026 full-year guidance.

If order performance exceeds expectations, it will bolster market confidence in the company's full-year revenue target of 34-39 billion euros; otherwise, it may trigger skepticism regarding the growth trajectory for 2026-2027.

Short-term pressures and long-term growth coexist.

The company provided a gross margin guidance range of 51%-53% for the first quarter of 2026, a decline from the approximately 54% level in the same period last year, primarily due to a shift in the product mix toward lower-margin categories and weaker-than-expected performance in the services business.

Despite the semiconductor recovery and robust demand for logic chips, shifts in the product portfolio and a slowdown in the services business could result in a year-over-year decline in gross margin. The company's gross margin of over 52% is largely supported by the high unit prices and technological barriers of EUV systems, alongside stable cash flow contributions from its installed base services.

New technologies such as High-NA EUV are in the early stages of commercialization, with R&D expenses remaining elevated (projected at approximately 1.2 billion euros for the first quarter of 2026), which, coupled with upward cost pressures, will constrain margin expansion.

However, management continues to maintain its long-term objective, planning to increase the gross margin to 57% by 2030.

From an earnings outlook perspective, if the first-quarter gross margin hits the upper end of the guidance range or if management offers a more optimistic full-year outlook, it would effectively mitigate market concerns over margin pressure; conversely, if gross margin performance misses expectations, given that the current stock price already factors in high growth expectations, it could further intensify the risk of a valuation correction.

Geopolitical risk

The Chinese market remains a critical component of ASML's global footprint; despite escalating export controls, domestic demand for deep ultraviolet (DUV) lithography machines continues to show resilience.

Data shows that the Mainland China market contributed 33% of ASML's global sales in 2025, serving as a vital revenue growth engine. However, ASML publicly stated in January this year that it expects the revenue contribution from the Chinese market to drop back to 20% in 2026.

In this first-quarter earnings report, investors will focus on revenue contribution figures from China and management's qualitative assessment of regional sales trends for the full year—if demand in the Chinese market exceeds expectations, it could partially offset volatility in other regional markets. However, if controls tighten further or demand slows significantly, it could place direct pressure on the company's overall order volume.

Currently, the proposed MATCH Act in the U.S. has become a primary risk hanging over ASML. According to reports, the bill not only plans to further restrict exports of chip-making equipment, including immersion DUV lithography machines, to Mainland China but also seeks to prevent equipment suppliers from providing maintenance services for tools already sold to Chinese manufacturers.

J.P. Morgan analysts estimate that if the MATCH Act is ultimately implemented, ASML's annual earnings per share (EPS) could be slashed by as much as 10%, and the Chinese market's share of business could slide further from the projected 20%.