ASML Likely to Beat Q2 Earnings Estimates: How to Play the Stock?

ASML Holding N.V. ASML may beat expectations when it reports second-quarter 2025 results before the market opens on July 16.

ASML expects revenues between €7.2 billion and €7.7 billion. The Zacks Consensus Estimate is pegged at $8.55 billion, indicating an increase of 27.2% from the year-ago quarter’s level.

The Zacks Consensus Estimate for earnings is pegged at $5.94 per share, up 37.5% from the year-ago quarter’s earnings of $4.32. The estimate has been revised upward by 14 cents over the past 30 days.

ASML Holding has an impressive earnings surprise history. The company’s earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 6.8%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Earnings Whispers for ASML

Our proven model predicts an earnings beat for ASML Holding this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($6.11 per share) and the Zacks Consensus Estimate ($5.94 per share), is +2.82%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: ASML carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Likely to Influence ASML’s Q2 Performance

The semiconductor sector is riding on a wave of resurgence, fueled by surging demand and the transformative potential of artificial intelligence (AI). This positive momentum has been a boon for companies like ASML, particularly in the wafer fabrication equipment space.

ASML Holding has been at the forefront of technological innovation, benefiting significantly from the industry’s shift toward smaller, more advanced technology nodes. These nodes are essential for building cutting-edge digital infrastructures that support AI, 5G and high-performance computing. The increasing complexity of chip designs has made ASML's state-of-the-art lithography tools indispensable to chipmakers.

In both logic and memory markets, the demand for ASML’s lithography tools continues to climb. The ongoing transition to next-generation memory technologies, such as DDR5 and high-bandwidth memory (HBM), is a tailwind for the company. With DRAM manufacturers ramping up technology upgrades, ASML Holding is likely to have witnessed strong momentum in the second quarter, driven by heightened memory demand.

ASML’s heavy investments in Extreme Ultraviolet (“EUV”) technology are also paying off. EUV lithography is critical for producing advanced chips, and the company’s service segment is benefiting from the rising demand for EUV-related services. In particular, the growing popularity of the NXE:3800 low numerical aperture (NA) machine, which can process 220 wafers per hour, is likely to have driven substantial EUV sales in the to-be-reported quarter.

Despite the strengths, macroeconomic challenges are likely to have negatively impacted ASML’s quarterly outlook. Intensifying U.S.-China trade tensions, coupled with export restrictions on advanced semiconductors and equipment to China, remain a critical headwind. Given ASML’s exposure to the Chinese market, these restrictions may have dampened the company’s overall performance. Nonetheless, strong demand for Deep Ultraviolet (“DUV”) lithography systems, which Chinese chipmakers use to manufacture mature-node chips, such as those based on the 28nm process, might have partially offset the negative impact of export restrictions on advanced semiconductor tools to China.

ASML Stock Price Performance & Valuation

ASML Holding shares have soared 15.7% year to date (YTD), outperforming the Zacks Computer and Technology sector’s rise of 7.4%. Comparing ASML with semiconductor peers, the stock has underperformed KLA Corporation KLAC, Lam Research Corporation LRCX and Applied Materials, Inc. AMAT. YTD, shares of KLA Corporation, Lam Research and Applied Materials have jumped 46.7%, 40.8% and 21.7%, respectively.

YTD Price Return Performance

Now, let’s look at the value that ASML offers to its investors at the current level. Currently, ASML Holding is trading at a premium. With a forward 12-month P/E of 27.7X, ASML is trading marginally higher than the sector’s average of 27.39X.

The stock trades at a premium to Lam Research and Applied Materials, while at a discount to KLA Corporation. Currently, KLA Corporation, Lam Research and Applied Materials have a forward 12-month P/E ratio of 27.76, 25.34 and 20.11, respectively.

Investment Thesis for ASML Stock

ASML Holding has a clear advantage in the chip equipment market. It is the only company capable of producing EUV lithography machines at scale. These machines are needed to make chips at 5nm, 3nm and soon 2nm levels — key to powering AI processors, mobile devices and data centers.

The company is already rolling out its next-generation High-NA EUV machines, which will be used for even smaller chips. As demand for faster and more efficient chips rises, especially with the growth of AI, ASML Holding stands to benefit. Its machines are a necessary part of the chip supply chain, and its customers, including TSMC, Intel and Samsung, will rely on ASML’s technology for years to come.

However, one concern is the company’s exposure to China. In 2024, China made up 41% of ASML’s shipments, which decreased to 27% in the first quarter of 2025. U.S. pressure on the Dutch government has led to export restrictions on some of ASML’s most advanced equipment, which could limit future sales in that market. Still, strong demand from other regions may offset that risk.

Conclusion: Hold ASML Stock for Now

ASML Holding’s dominance in EUV and High-NA EUV technology, along with solid revenue visibility, makes it well-positioned for future growth. With rising demand for advanced nodes, AI chips and high-bandwidth memory, ASML’s lithography tools will remain mission-critical. However, export restrictions on advanced semiconductors and equipment to China and a high valuation multiple warrant a cautious approach to the stock.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research