Will Logic and Memory Growth Help ASML Meet 30-35B Euro Sales Target?

ASML Holding ASML delivered a solid first-quarter fiscal 2025, posting €7.74 billion in net sales, up 46.4% year over year and came within management’s guidance range of €7.5-€8 billion. Buoyed by strong top-line performance, management reaffirmed its full-year revenue outlook of €30 billion to €35 billion, implying year-over-year growth of 15% at the mid-point. The company is attributing the growth to stem from sustained customer investment in advanced logic and memory nodes.

Bookings in the first quarter of fiscal 2025 totaled €3.9 billion, with 60% coming from logic customers and 40% from memory. This reflects strong momentum in both segments. Logic demand continues to be driven by leading-edge nodes. Management also expects Memory revenues to remain strong. This is driven by growth in ASML’s installed base, an increasing contribution from extreme ultraviolet (EUV) and a rise in revenues from its upgrade business.

Additionally, on the technology front, all NXE:3800E systems are now being shipped at full specification, supporting 220 wafers per hour, mature for high volume manufacturing. These systems are ramping up in both logic and memory applications, with high NA EUV enabling customers with shorter cycle time and lower costs, resulting in better yield.

ASML has also made progress in High NA EUV, having shipped its fifth and final NXE:5000 system during the first quarter. In total, five systems have been delivered to three customers. ASML has earlier stated that it plans to begin shipments of the NXE:5200, a follow-on to its High NA system model, from the second quarter of 2025. 

With rising tool adoption in both logic and memory and increasing customer confidence in EUV and High NA roadmaps, ASML’s growth momentum is likely to continue in the near term. ASML remains well-positioned to stay within its full-year guidance range, supporting the company's belief that 2025 and 2026 will be growth years.

How Competitors Fare Against ASML

Applied Materials AMAT expects strong momentum in foundry-logic and DRAM. Additionally, AMAT is projecting over 40% growth in DRAM revenues for fiscal 2025. Applied Materials is attributing the growth to be driven by increased adoption of the Sym3 Magnum etch system and Cold Field Emission eBeam in high-bandwidth memory and gate-all-around applications.

Lam Research LRCX reported a record quarter for foundry revenues in its third quarter of fiscal 2025. The growth was driven by LRCX’s shipments for gate-all-around nodes and advanced packaging spending. DRAM demand remains strong, especially for enabling DDR5, LPDDR5, and High Bandwidth Memory. Lam Research’s new Akara etch and Altus Halo molybdenum platforms are key enablers in logic and memory scaling.

ASML’s Price Performance, Valuation and Estimates

Shares of Applied Materials have gained 13.6% year to date compared with the Semiconductor Equipment - Wafer Fabrication industry’s growth of 13.7%.

ASML YTD Price Return Performance

From a valuation standpoint, ASML Holding trades at a forward price-to-sales ratio of 8.05X, higher than the industry’s average of 7.5X.

ASML Forward 12-Month P/S Ratio

The Zacks Consensus Estimate for ASML Holding’s fiscal 2025 and 2026 earnings implies year-over-year growth of 30.45% and 13.58%, respectively. The estimates for fiscal 2025 have been revised downward in the past 30 days, while estimates for fiscal 2026 have been revised upward in the past seven days.

ASML Holding currently carries a Zacks Rank #3 (Hold). 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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