ASML’s Q4 Bookings Double as €320–400 Million EUV Machines Command 90% Market Share
ASML holds over 90% share of the lithography market as the sole provider of EUV machines priced at €320–400 million each, with Q4 2025 bookings more than doubling analyst expectations. Bank of America projects ASML will monopolize next-gen high-NA EUV lithography, reinforcing its barrier to rivals Nikon and Canon.
1. Robust Q4 Financial Performance
In the fourth quarter, ASML reported a 27% year-over-year increase in net income and achieved a 52.8% gross margin, driven by strong demand for its extreme ultraviolet (EUV) lithography systems. Overall revenues rose nearly 5% compared with the same period last year, as EUV-driven Systems sales more than offset weaker Services revenues and higher operating costs. Despite missing some analysts’ revenue forecasts, the company’s profitability metrics underscore the premium pricing and high utilization rates of its EUV platforms.
2. Record Order Intake and Extended Backlog
ASML ended the quarter with record net bookings that exceeded $10 billion, reflecting continued surges in demand from both memory and logic chipmakers. Orders skewed approximately 56% toward memory applications, highlighting new growth optionality beyond its traditional logic chip base. The firm’s backlog now covers more than 12 months of production, providing clear visibility into capacity utilization and supporting management’s assertion that supply constraints will persist throughout 2026.
3. Guidance for 2026 and Capital Return Program
Management reaffirmed its expectation that 2026 will be another year of revenue growth, targeting full-year sales between €34 billion and €39 billion. To bolster shareholder returns, ASML announced a €12 billion share buyback program to run through the end of 2028, complementing its quarterly dividend. The company noted, however, that short-term demand could fluctuate in line with grid capacity constraints at key semiconductor fabs and the timing of system installations.
4. Valuation Considerations and Investor Sentiment
ASML’s stock has more than doubled over the past seven months and currently trades at roughly 44x forward earnings, well above the 32x sector median. While the firm’s near-monopoly in EUV lithography and leadership in next-generation high-NA systems underpin a compelling long-term growth narrative, some investors have begun to book profits following the recent run. Analyst price targets vary widely—from $950 to $1,672—reflecting divergent views on how quickly capacity expansions and macroeconomic factors will translate into incremental system deliveries.