ASML and Intel's 18A-P process advances collide with dual narratives of the US MATCH Act's containment of Chinese chips.
Even as ASML's stock price hovers below its 52-week high, a political storm brewing in Washington could devastate this Dutch lithography giant's highly profitable revenue stream from China. The stock closed Friday at €1,661.20, just 1.76% below the recent high of €1,691.00 set after Intel announced a major process node breakthrough at the VLSI Symposium in Honolulu on June 16. Yet beneath this rally, U.S. trade officials have accused ASML of illegally exporting tightly controlled extreme ultraviolet (EUV) components to China—an accusation ASML has vehemently denied—while a new congressional bill threatens to completely cut off its service revenue from older deep ultraviolet (DUV) machines.
Intel's announcement of its enhanced 18A-P process node gave ASML shareholders immediate cause for celebration. The node delivers a 9% boost in compute performance at the same power consumption, or an 18% reduction in power consumption while maintaining performance, along with a 20–40% improvement in heat dissipation. Critically, it is fully compatible with the preceding 18A node, meaning existing chip designs can migrate without redesign. For ASML, the world's only supplier of extreme ultraviolet (EUV) lithography systems, every new manufacturing process node that Intel pushes into risk production translates directly into incremental demand for its machines. The logic is straightforward: more nodes, more tools, more revenue.
The market has already digested this positive news. ASML shares have risen 68% since the start of the year, up nearly 180% from the 52-week low of €593.60 recorded in August 2025. A large-scale buyback program provides further support: management has allocated up to €12 billion for share buybacks between 2026 and 2028, deploying approximately €1.1 billion in the first quarter alone—equivalent to €16 million per trading day. Chief Executive Officer Christopher Fouquet emphasized the demand backdrop in the Q1 report, stating: "Chip demand exceeds supply. Our customers are accelerating capacity expansion plans for 2026 and beyond." Customers in both memory and logic chips have already filled their order books for next year and are increasing capital expenditures. ASML expects to deliver at least 60 low numerical aperture EUV systems this year and at least 80 in 2027.
Should investors sell immediately? Or is ASML worth buying?
The next catalyst on the calendar is the second-quarter earnings release in July. Consensus expectations call for earnings per share of $8.06 and revenue of approximately $10.45 billion, with nine analysts raising their estimates over the past 90 days and none lowering them. ASML's own guidance points to quarterly revenue up to €9.0 billion and gross margins exceeding 51%, with order books remaining thick thanks to aggressive investment by AI chip manufacturers. The first quarter already beat expectations: net sales of €8.8 billion surpassed the consensus estimate of €8.5 billion, and net income of €2.8 billion exceeded the estimate of €2.5 billion, with management raising its 2026 revenue guidance to the €36–40 billion range.
Despite the stock's performance far exceeding analysts' average price target, the analyst community remains predominantly bullish. Of the 44 analysts surveyed, a majority rate ASML a strong buy, though the average price target of $1,707 is about 12% below the current price. Bank of America Securities maintains its $2,268 target and forecasts ASML revenue will reach €7.3 billion by 2030. JPMorgan Chase raised its valuation after concluding that ASML can deliver over 110 low numerical aperture EUV tools annually—up from a previous ceiling of 90.
But the political landscape is darkening. U.S. Commerce Secretary Howard Lutnick has directly confronted ASML management, with U.S. officials claiming to possess evidence of ASML illegally exporting controlled EUV components to China. ASML has absolutely denied the accusation, pointing out that its EUV machines are school bus-sized and weigh 180 tons, making covert transport virtually impossible. A more concrete threat comes from the MATCH Act, submitted to Congress in April, which would prohibit the export and servicing of older DUV machines to China. China accounted for approximately 20% of ASML's total revenue in 2025, a figure that declined to 19% in the first quarter—lower than the 36% from the previous quarter. A servicing ban would directly threaten these recurring service fees. Management explicitly cited export restrictions as a reason for the wide range of its 2026 revenue guidance. July's Q2 data will reveal whether headwinds from China are offset by AI-driven growth from other regions. For now, strong fundamentals and buyback programs support a valuation that already far exceeds consensus targets.
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