ASML expects supply to fall short of customer demand until at least 2028. Cantor Fitzgerald analyst C.J. Muse described ASML as effectively sold out through calendar year 2028. Muse reiterated an Overweight rating and a €2,500 price target, about $2,785. The target is roughly 66% above Wednesday's ADR stock price of $1,675. ASML remains one of Cantor's Top Picks. Muse said Wednesday's third-quarter call made clear that demand is exceeding supply.
Chipmakers are already asking to book machines for 2029 and 2030. However, ASML is not yet accepting orders for those years. ASML wants a clearer view of total demand first to avoid excluding long-term customers. ASML's extreme ultraviolet (EUV) lithography machines print the smallest circuits on advanced chips. Management described planned 30% capacity increases for 2027 and 2028 as minimums rather than limits. ASML is looking for ways to increase 2028 output further.
Non-current contract liabilities jumped 160% from the prior quarter. Muse believes those liabilities largely represent down payments that customers make to secure future machines. Muse called the roughly 85 low-NA EUV tools planned for 2027 conservative. Cantor models 90 tools. ASML gave no new shipment number for 2027 and 2028.
ASML's third-quarter revenue rose 55% year over year to €11.66 billion ($12.99 billion). Earnings per share of €12.93 ($14.40) exceeded the €10.30 ($11.47) consensus. ASML's December-quarter revenue guidance midpoint of €14.7 billion ($16.37 billion) also exceeded the €13.7 billion ($15.26 billion) consensus.
ASML has agreed on value-based pricing with key customers, under which prices rise with machine productivity. The pricing changes take full effect in 2028. Cantor forecasts gross margins of 59% in 2028 and considers 60% very achievable. Cantor now expects 2028 earnings per share of €80 ($89.11), well above the €67.88 ($75.61) consensus.
ASML said China has little reason to build domestic machines as long as ASML continues selling machines in China. China accounted for 23% of third-quarter revenue. Muse said domestic lithography technology in China remains a longer-term risk rather than a near-term threat to ASML's business.
ASML's U.S.-listed shares fell 2.1% to $1,680.92 on Wednesday afternoon. The shares are down 6% over the past week. The shares are about 16% below the 52-week high. However, the shares remain up 48% this year. The waiting list now extends to the end of the decade. The stock price does not yet reflect that demand.
ASML Sold Out Until 2028, Cantor Fitzgerald Sees 66% Stock Upside
BenzingaShare
Summary
ASML is sold out through 2028, with demand outpacing supply, as the fear and greed index in the tech sector hits extreme levels. Cantor Fitzgerald analyst C.J. Muse keeps an Overweight rating and a €2,500 price target, suggesting a 66% upside from the $1,675 ADR stock price. ASML plans a 30% production boost in 2027-2028, while non-current contract liabilities jumped 160% from last quarter, likely from customer deposits for future chips. Crypto price movements remain separate, but the semiconductor rally shows no sign of slowing.
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