Layer 2 · ASML — ASML Holding
Thesis
The lithography monopoly intact — FY26 guide raised to EUR 36-40B, High-NA EUV ramping, Intel 18A and TSMC A14 pulls accelerating. Tier B because the China DUV export overhang (roughly 25% of pre-controls revenue) is a persistent headwind that caps multiple expansion until either it stabilises or proves immaterial.
What it does + financial print
ASML is the sole supplier of EUV lithography tools on the planet — every leading-edge logic and DRAM fab below 7nm runs ASML tools. Low-NA EUV is the workhorse; High-NA EUV (EXE:5000, EXE:5200) is the next-node tool starting volume ramp now. The DUV tools (immersion + dry) are the mid-node franchise still highly profitable but increasingly under China export scrutiny.
Q1 2026 (April 15) printed EUR 8.8B revenue versus EUR 8.5B consensus — a beat. EUR 2.8B net income vs 2.5B consensus. FY26 guide raised to EUR 36-40B (from 34-39B). Q2 guide EUR 8.4-9.0B. Stock initially sold off -6% on China export-control tightening news the next day.
Bull case
High-NA ramps cleanly at Intel 18A, TSMC A14, and Samsung 2nm/1.4nm — each High-NA tool is ~EUR 380M, so even a single-digit number of incremental tool wins matters. China DUV pressure stabilises (either via licence flexibility or non-China demand offsetting). FY27 guide stays >20% growth.
Gap / bear case
China DUV revenue is ~25% of historical mix and under sustained pressure. Even a clean monopoly trades at a discount if a meaningful share of TAM is geopolitically encumbered. Trump-administration export controls could escalate further — there are scenarios where DUV-to-China gets fully restricted.
Trigger to upgrade / downgrade
Upgrade to Tier A on (a) High-NA Q3 or Q4 print showing >3 tools shipped to leading-edge customers, OR (b) a pullback to $1,300-1,400. Downgrade on China DUV revenue dropping below 10% of total without offset.
The trade
- Entry zone: $1,300-1,400 on pullback
- Stop: $1,200 close (200-day)
- Position size: 2% NLV
- Catalyst date: Q2 print July 16 2026
- Conviction: 7/10