ASML’s Record Forecast Meets a Reality Check as Margins Dip and Order Details Vanish

ASML delivered a standout first-quarter performance, raised its full-year outlook, and rewarded shareholders with a bigger dividend — yet the stock ended the week lower than where it started. The disconnect between operational strength and market sentiment has rarely been more pronounced for the Dutch lithography giant.

The company posted net sales of €8.8 billion for the first quarter of 2026, a 13% year-on-year increase, alongside a net profit of €2.8 billion. Earnings per share of €7.15 beat analyst expectations, but the shares initially slumped more than 7% following the release before recovering some ground. The market, it appears, had already priced in the good news.

What unsettled investors was not the headline numbers but what lay beneath. ASML guided for a second-quarter gross margin of 51% to 52%, a noticeable step down from the 53% achieved in Q1. That margin compression, combined with the company’s decision to withhold specific order intake figures for the first time, created an air of uncertainty around what is traditionally the most closely watched metric in the semiconductor equipment space. CEO Christophe Fouquet described order intake as “very strong” but offered no numbers to back that up.

A Shifting Geographic Mix and a New Productivity Boost

The composition of ASML’s sales shifted markedly in the quarter. EUV systems accounted for 66% of system revenue, up from 48% in the previous quarter. Geographically, the balance tilted sharply toward South Korea, which jumped to 45% of sales, while China’s share fell from 36% to 19% — a reflection of ongoing export restrictions and changing customer dynamics.

On the product front, ASML launched the NXE:3800E PEP-E, a productivity package for its best-selling EUV system that boosts throughput from 220 to 230 wafers per hour. The upgrade is particularly significant for the company’s high-margin services business, which generated more than double the entire research and development spend in the quarter.

Dividend, Buybacks, and a Board Refresh

Shareholders approved a final dividend of €2.70 per share at the annual general meeting on April 22, bringing the total payout for the 2025 financial year to €7.50 — a 17% increase from the prior year. The stock traded ex-dividend on April 24, with payment scheduled for May 5.

Should investors sell immediately? Or is it worth buying Asml?

The company’s €12 billion share buyback program, covering 2026 through 2028, is already underway. ASML repurchased €1.1 billion worth of shares in the first quarter alone, and the AGM authorized management to buy back up to 10% of issued capital.

In a management reshuffle, Marco Pieters was appointed chief technology officer, expanding the executive board to six members.

The Stock and the Long View

ASML shares closed at €1,240.80 on Friday, roughly 4% below their 52-week high of €1,295.00 but more than double their level a year ago. The relative strength index of 66 suggests slightly elevated momentum without signaling an overheated market. Since the start of 2025, the stock has gained nearly 25%.

The medium-term outlook remains robust. Memory and logic chip customers are increasing their capital expenditure budgets for 2026 and beyond, driven by AI demand and capacity constraints in the memory segment. ASML sees annual revenue potential of €44 billion to €60 billion by 2030, with gross margins between 56% and 60%. The company is also just beginning to ramp production of its next-generation High-NA EUV systems, which are essential for the most advanced chip fabrication and should cement ASML’s near-monopoly position for years to come.

For now, however, the market is focused on the near-term margin squeeze and the missing order data — a reminder that even the strongest fundamentals can face a skeptical audience when expectations run high.