ASML’s Strongest Quarter Yet Clashes With a Sector-Wide Jolt as Kimi-K3 Shifts Sentiment
Published on 07/20/2026 at 11:50 | Redaktion boerse-global.de
The Veldhoven-based chip equipment giant delivered its second guidance upgrade in twelve months on the back of a stellar second quarter, yet the stock found itself caught in a broader technology rout triggered by a surprise Chinese AI release. ASML’s shares slipped 2.51 percent to €1,528.00 on Friday, a drop that had little to do with the company’s own performance and everything to do with the sudden reappraisal of the entire artificial intelligence supply chain.
For the three months ended June, ASML booked net revenue of €9.3 billion and net profit of €2.9 billion, with a gross margin of 54.0 percent — all figures above the upper end of its own target range. The company now expects full-year 2026 net revenue of €43 billion to €45 billion, up from the prior forecast of €36 billion to €40 billion. The gross margin outlook was similarly raised to 54 to 56 percent from an earlier 51 to 53 percent, and for the third quarter the group guides for revenue between €11.0 billion and €12.0 billion at a gross margin of 55 to 57 percent.
The catalyst behind the margin expansion and revenue lift is twofold: surging customer investment in AI infrastructure and a major manufacturing milestone. Intel Foundry has begun volume production of certain Core Ultra Series 3 processors (Panther Lake) on its 18A node using ASML’s high-NA EUV lithography systems — the first time any chipmaker has deployed the next-generation technology for logic chips at scale. For ASML, this proves the machines work in an industrial setting, not just in a laboratory, and allows both companies to refine manufacturing processes in real-world conditions.
To meet rising demand, ASML is ramping output. Production of low-NA EUV and DUV immersion systems is set to increase by roughly 30 percent in 2027 compared with 2026, and the company is evaluating a further expansion of the same magnitude for 2028. The capital-return programme remains on track: ASML bought back roughly €1.1 billion of its own shares in the second quarter as part of a multi-year buyback running through 2028, and it declared an interim dividend of €1.88 per share. The shares trade ex-dividend from July 27, with payment due on August 5.
Should investors sell immediately? Or is it worth buying Asml?
Yet the day the quarterly numbers landed, the stock initially surged over 7 percent before giving back most of those gains and closing the session marginally in the red. Even before the release, some analysts had flagged valuation concerns: the price-to-earnings ratio of approximately 50 was compared with the peaks seen during the pandemic era, leading one observer to describe the equity as “slightly overvalued.” The subsequent sell-off on Friday, triggered by the launch of Moonshot AI’s Kimi-K3, deepened the pullback. Apple reclaimed its title as the world’s most valuable company, and the Philadelphia Semiconductor Index suffered its worst weekly drop in over a year, sliding more than 18 percent in July alone. TSMC lost over 3 percent on Friday, and Nvidia gave up 2.2 percent.
CFRA chief strategist Sam Stovall characterised the mood succinctly: the chip story is over because the AI story is far from over, comparing the industry to an army that has outrun its supply lines. For ASML, the instant reaction underscores how even a company with a freshly raised forecast and a technological first can be swept up in a sector-wide episode of risk aversion. The stock remains 12.59 percent below its record high of €1,748.00 set on June 30, though it still stands 65.82 percent higher year-to-date.
Most Wall Street analysts have kept their positive ratings on ASML, with several raising price targets after the quarterly report. Their underlying conviction is that fundamental AI-driven demand remains intact, even if near-term sentiment has soured. A longer-term headwind sits outside the market cycle: China is expected to contribute roughly 20 percent of ASML’s revenue in 2026, a figure that is declining from earlier years but remains significant. At the same time, the U.S. government continues to push for tighter export controls on chipmaking equipment bound for Beijing, leaving Europe’s most valuable company balancing security concerns in Washington against a still-lucrative Chinese customer base.
Asml at a turning point? This analysis reveals what investors need to know now.
Friday’s sell-off, then, is less a judgment on ASML’s execution and more a reflection of a market wrestling with how long the AI investment boom can sustain its pace. The company’s own guidance — raised twice in a single year — remains independent of that week’s mood swings. The next check-in will come with third-quarter results, which will test whether the aspirational gross margin of up to 57 percent can be converted into reality.
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