ASML shares declined sharply in response to renewed U.S. tariff threats on European exports. On Monday, the stock fell 3.6% after President Trump announced plans for a 10% levy on imports from key markets including the Netherlands beginning February 1, 2026, escalating to 25% by June 1 if no agreement is reached. Goldman Sachs estimates that such measures could reduce real GDP in affected European economies by up to 0.2%, with Germany facing the largest hit. As ASML derives roughly one-quarter of its revenue from U.S. chipmakers, investors sold the stock on concerns that higher import costs would dampen equipment orders in ASML’s core photolithography business.

Despite trade-war jitters, robust demand for AI chips continues to underpin ASML’s medium-term outlook. Over the past 12 months, the stock has gained approximately 80%, driven by strong order intake for extreme ultraviolet (EUV) lithography systems. Year to date, ASML is up 17%, reflecting commitments from major foundries to expand AI data-center capacity. Management has guided for record equipment shipments in 2026, projecting capital expenditure from leading chip manufacturers to exceed $70 billion, with ASML capturing a double-digit share of this spend.

ASML trades at 44.6 times forward price-to-earnings, a premium relative to the broader semiconductor equipment sector average of 28.5. Investors are nonetheless willing to pay up given ASML’s near-monopolistic standing in EUV lithography, which accounts for over 30% of the company’s 2025 revenue. Analysts at Jefferies and Morgan Stanley maintain overweight ratings, citing limited competition and long order backlogs stretching into 2027. Consensus forecasts indicate 2026 revenue growth of 25% year-over-year and operating margins expanding to 52%.

A cohort of Wall Street strategists sees further upside for ASML, with the average 12-month price target standing at $1,500, implying 20% upside from current levels. This projection assumes continued strength in AI-driven capex and minimal cancellation risk on placed orders. Even under a scenario where U.S. tariffs rise to 25%, Goldman Sachs models suggest only a modest 0.1%–0.2% drag on ASML’s top line, given that European exports account for a smaller share of its global sales mix. Investors should, however, monitor potential euro-dollar fluctuations and any escalation of trade barriers that could affect European equipment shipments.