ASML Climbs 11% in a Month: Time to Buy, Sell or Hold the Stock?

ASML Holding ASML shares have surged 11.3% in the past month, outperforming the Zacks Computer and Technology sector’s decline of 3.4%. ASML stock has also outperformed its peers, namely Lam Research LRCX and KLA Corporation KLAC, while underperforming Applied Materials AMAT in the same time frame.

ASML One-Month Performance Chart

Shares of Lam Research, KLA Corporation and Applied Materials have returned 10.8%, 1.1% and 19.1%, respectively. This surge in stock price has also made ASML stock overvalued. ASML stock trades at a forward 12-month price-to-sales (P/S) of 12.66X compared with the sector average of 6.37X, which makes it overvalued at present, as suggested by the Zacks Value Score of F.

ASML Forward 12-Month Valuation Chart

Now the question remains: Should the investors buy, sell or hold shares of this semiconductor manufacturing equipment player?

ASML Gains From AI-Led Demand Surge for HBM and DRAM Nodes

Sustained demand for artificial intelligence and high performance computing chips by global data centers, AI labs and hyperscalers has reinforced ASML’s long-term growth outlook as the company provides extreme ultraviolet (EUV) semiconductor lithography tools to chip manufacturers that enable them to accelerate capacity expansion.

ASML’s management on the fourth-quarter 2025 earnings call noted that ASML’s customers have become more confident about medium-term AI demand, leading to stronger order intake and investment plans as chipmakers transition from 4-nanometer to 3-nanometer and prepare for the 2-nanometer transition.

As EUV intensity per wafer continues to rise, AI and HPC workloads are addressed more efficiently. In memory, robust demand for high-bandwidth memory (HBM) and advanced DRAM nodes is expected to tighten supply through at least 2026, further supporting EUV demand.

ASML is also benefiting from a growing installed base, which is driving high-margin service and upgrade revenues as customers increasingly view upgrades as the fastest way to add capacity. With a €38.8 billion backlog and reaffirmed long-term targets, ASML remains well-positioned to capitalize on the AI-led semiconductor investment cycle.

For 2026, ASML expects its revenues in the range of €34-€39 billion. The Zacks Consensus Estimate for ASML’s 2026 revenues is pegged at $43.31 billion, indicating a year-over-year improvement of 17%.

ASML Dominates the EUV Landscape Unchallenged

Although ASML faces competitive pressure from players like Lam Research, Applied Materials and KLA Corporation in the broader wafer equipment manufacturing market, ASML holds a near-monopoly in EUV technology.

EUV is crucial for the world’s most advanced chips at 3nm and below; it benefits from extraordinary pricing power and strategic importance with major customers like TSMC, Samsung and Intel.

ASML’s venture into sub-2nm production with High Numerical Aperture (High-NA) EUV systems is the next technological leap for chipmakers. This technology will provide ASML with long-term potential as the industry moves toward denser and more efficient chips. ASML’s High-NA machines will be central to that shift.

The Zacks Consensus Estimate for ASML’s 2026 earnings is pegged at $33.63, indicating a year-over-year improvement of 20.3%. The consensus estimate has been revised upward in the past seven days.

Conclusion: Buy ASML Stock Now

ASML’s unmatched EUV leadership, AI-driven demand visibility, and strong earnings momentum support a long-term bullish view, making this Zacks Rank #2 (Buy) stock attractive at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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