ASML’s recent financial results have boosted its status as Europe’s most valuable company, although concerns about its ability to fulfill record orders have caused its stock to dip. After reaching new highs following a report of fourth-quarter earnings, ASML shares ended down 2%. The volatility in trading reflects the company’s struggle to meet high investor expectations. ASML shares have increased by 34% this month and currently trade at 42 times the estimated earnings for 2026, significantly higher than Nvidia’s 25 times.
ASML management projects sales growth this year between 4% and 19%. Analysts note that much of the good news is already reflected in the stock price, with some fearing that this high valuation aligns with a risky investment environment. ASML’s stock, valued at €467 billion, has a significant order backlog of €38.8 billion, but the production of its advanced chip-manufacturing machines can take up to a year.
Supporters of ASML highlight its strong prospects tied to artificial intelligence and capacity expansions from its largest customer, TSMC, and other memory chipmakers. Some investors, however, question the sustainability of high multiples. Concerns about ASML’s capacity persist, yet the CEO assured that the company would avoid becoming a bottleneck. Analysts believe the valuation is justified in light of the ongoing AI investment cycle. Despite worries of potential delays affecting new chip facilities, some analysts recommend ASML for its long-term growth potential, urging that skepticism over its price may lead to missed investment opportunities.
With information from Reuters
